The protocol provides for a number of changes considered to have been made to certain documents dating back to before 2002, when these documents are used as part of a 2002 master`s contract. Some questions arise only in a pre-2002 document, but a number of questions arise in more than one document from before 2002 and are therefore dealt with in more than one appendix: how long do I have to participate in the 2002 Masteragreement Protocol? Is there a delay? Do I need to have signed a 2002 master`s contract before participating in the 2002 Master Agreement Protocol? There is therefore the potential for real ambiguities if these documents are used without modification as part of a 2002 master`s degree. Although the parties are free to address the issues whenever they use a pre-2002 ISDA document as part of a 2002 master`s degree (by incorporating provisions into their confirmation or credit assistance agreements), this requires care and commitment of resources. By far, the safest and most effective way to address problems is to follow protocol. Some counterparties have avoided using the 2002 agreement to avoid disrupting their existing AN links to support ISDA loans, although there is assistance here through the terms of modification of ISDA`s credit support annexes under English and New York legislation. Finally, many documents must be recycled in the 2002 agreement. Some received market training 18 months or more ago, pending faster implementation of the 2002 agreement. What is protocol? The 2002 master agreement, published in July last year, is the youngest member of the ISDA family. ISDA began drafting minutes in 1998 by publishing its protocol to the European Monetary Union, which had more than 1,100 market participants.
The issues are perhaps different, but the common characteristic of the protocols is the multilateral mechanism they provide. This mechanism allows one party to address certain issues between itself and all other proponents of the protocol by a simple act, saving time and costs that would otherwise have to be devoted to several bilateral negotiations. Introduction and Overview of Memorandum of Understanding 2002 For the submission of the loyalty letter, the contracting party agrees that the provisions of each selected appendix apply to each party member in 2002, if or to the extent that their choice of this appendix is consistent with the correspondence established in the loyalty letter submitted by the other party. The protocol provides for a multilateral mechanism for several parties to agree that, for each 2002 master`s agreement, which will be concluded between two of them or in the future, various standard changes apply when certain documents dating back to before 2002 are used under this 2002 master agreement. It provides for this by providing that the provisions adopted by two members take effect not only for the 2002 masters already received between them, but also for each 2002 master which was adopted later between them (before or after the expiry of the compliance period). This forward-looking approach allows as many market players as possible to exploit the limited opportunities offered by the protocol.