Credit Derivatives Execution Agreement
The framework contract and the timetable shall determine the reasons why one of the parties may require the conclusion of covered transactions due to the occurrence of a termination event by the other party. Standard termination events include defaults or bankruptcy. Other termination events that can be added to the calendar include a credit degradation below a certain level. As soon as possible, but in any event within thirty minutes of execution, Party A shall transmit the details of the relevant derivative transaction(s) electronically to an agreed distribution system. As soon as possible after receipt of the deposit from Party A and, in any event, within two hours, Party B must either confirm, refuse or deny knowledge of the transaction in question (unless the submission took place within three hours from the last date for which trades may be subject to clearing on a given day, in this case, the period for confirmation, refusal or refusal is 9:00 local time on the next working day). Transactions underlying a CDEA remain subject to the applicable contractual conditions (e.g. (B.dem ISDA framework contract in the case of OTC derivatives transactions). The purpose of the CDEA is to serve as a model for counterparties to use in documenting the process for depositing, accepting and refusing certain transactions for approval. The document is first and foremost a first draft whose authors acknowledge that it may not be necessary or appropriate in all circumstances and that it is subject to change and/or replace if the rules on CCP clearing evolve. The CDEA applies both to over-the-counter (OTC) derivatives transactions and to transactions carried out through a multilateral or other trading system («derivatives transactions») to be traded through a «clearing entity». However, it does not apply to futures, options and other derivatives that are executed on a regulated foreign market or trading manager or subject to the rules of a regulated foreign market or chamber of commerce. An ISDA framework contract is the standard document used regularly to regulate derivative trading transactions. The agreement, published by the International Swaps and Derivatives Association (ISDA), outlines the terms applicable to a derivatives transaction between two parties, typically a derivatives dealer and a counterparty.
The ISDA framework contract itself is standard, but it comes with an adapted schedule and sometimes a credit support schedule, both signed by both parties in a given transaction. Following the acceptance by the competent clearing organisation of a derivatives transaction for clearing, it shall be considered that each Party A and Part B have entered into separate cleared derivatives transactions governed by the agreement in force with their respective clearing member (unless Party A and/or Part B are already clearing members of the clearing organisation concerned) and that each of the parties may have no other rights or obligations in relation to the other derivatives transaction in question. . . .