Isda Fmia Top up Agreement

The International Swaps and Derivatives Association (ISDA) and the Futures Industry Association (FIA) jointly created a Top-Up Agreement to address specific requirements of the US Dodd-Frank Wall Street Reform and Consumer Protection Act. This agreement is known as the ISDA FMIA Top-Up Agreement.

The Dodd-Frank Act was enacted in the aftermath of the financial crisis of 2007-2008 to increase accountability and transparency in the derivatives market. The Act requires swap dealers and major swap participants to comply with certain regulations, including margin requirements. The ISDA FMIA Top-Up Agreement is designed to be used in addition to existing Master Agreements between parties to comply with the regulatory requirements set out in the Dodd-Frank Act.

The ISDA FMIA Top-Up Agreement provides standardized language that addresses the specific requirements of the Dodd-Frank Act. It is designed to be used for new and existing swap transactions that are covered by the Act, and it can be used by any parties subject to the Act, regardless of their location.

The agreement covers a range of topics including collateral, valuation, and record-keeping. It includes provisions for the exchange of margin, the provision of credit support, and the calculation and timing of margin calls. The agreement also includes language on the transfer of collateral between parties, and the use of third-party custodians to hold collateral.

The ISDA FMIA Top-Up Agreement is an important tool for parties subject to the Dodd-Frank Act. Compliance with the Act’s margin requirements can be complex and time-consuming, and the agreement provides a standardized approach to addressing these requirements. It also helps to reduce legal and operational risks associated with swap transactions.

In conclusion, the ISDA FMIA Top-Up Agreement is an important document for parties involved in swap transactions subject to the Dodd-Frank Act. It provides a standardized approach to complying with the Act’s margin requirements, reducing legal and operational risks associated with these transactions. All parties involved in such transactions should ensure that they are familiar with the provisions of the agreement and how it applies to their specific transactions.