24 Sep Isda Form Of Novation Agreement
If a legal novation has not been properly carried out, the agreement stipulates that such transfers would not be valid, which would result in the initial trade between its original contracting parties remaining valid and binding. Consequently, problems would arise if a party mistakenly believed that it had legal access to a trade to a third party and, consequently, had cancelled that trade and the corresponding cover in its books and then found, usually after a credit event occurred, that it was invited to treat a business in the denominator as the seller of protection. * If, for whatever reason, the agreement of the remaining party has not been obtained by the buyer in electronic form up to 6p.m. 24, 2005, establishes a series of clear good practices that the three parties must follow in order to obtain a legal novation of a credit derivative or interest rate transaction. Instead of modifying the agreement as it is the purpose of the ISDA protocols, the protocol expands the agreement by defining the steps to be taken to obtain the prior written consent of the remaining party. . . .