The standardization process is inextricably linked with the early stages of privatly-negotiated over-the-counter derivatives transactions dating back to the 1980s. The main obstacle to further development and growth of the market was non-standardization - the lack of common »language« through which market participants could swiftly and effectively negotiate deals and document transactions. Initially geographically focused attempts of standardization were superseded by two versions of ISDA Master Agreement, first being published in 1992 by the International Swaps and Derivatives Association. The standard set of documents, consisting of the pre-printed form of the Agreement, customized Schedule and Confirmations evidencing the terms of each trade, merges the need for standardization and customization. Moduar architecture, meaning combining and complementing the standard set with other ISDA template documents in a building block manner, allows flexibility and facilitates adaptation to financial engineering. In terms of content, the Agreement is focused on reducing legal and counterparty credit risks, mainly with the use of provisions regarding close-out netting and jurisdiction, but also with a common set of legal terms, which helps to exclude different interpretations of the terms used in the Agreement. As such, the ISDA Master Agreement has been recognised as an industry-standard form.
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