The ISDA August 2012 DF Terms Agreement is a standard document that many financial institutions use to document certain types of derivative transactions. The document was created by the International Swaps and Derivatives Association (ISDA), a trade association that represents participants in the global derivatives market.
The ISDA August 2012 DF Terms Agreement is designed to provide a framework for documenting certain types of over-the-counter (OTC) derivatives transactions, including interest rate swaps, foreign exchange swaps, and credit default swaps. The document includes a number of standard provisions that are designed to provide clarity and consistency in the terms of these transactions.
One of the key features of the ISDA August 2012 DF Terms Agreement is the inclusion of certain representations and warranties. These representations and warranties are statements made by the parties to the transaction about their ability to enter into the transaction and their understanding of the terms and risks associated with the transaction. By including these representations and warranties, the parties can help to minimize the risk of misunderstandings or disputes arising later on.
Another important feature of the ISDA August 2012 DF Terms Agreement is the inclusion of certain events of default. These events of default are situations in which one of the parties to the transaction may be deemed to have defaulted on the agreement. Examples of events of default include failure to make payments when due, breach of certain representations and warranties, and bankruptcy or insolvency of one of the parties.
Overall, the ISDA August 2012 DF Terms Agreement is a valuable tool for financial institutions that engage in OTC derivatives transactions. By providing a standard framework for these transactions, the document helps to ensure consistency and clarity in the terms of these agreements. Additionally, the inclusion of representations and warranties and events of default can help to minimize the risk of disputes arising later on.