Czech Definitions and Czech Supplement to the 1992 ISDA Master Agreement

in effort to improve market environment,

1. in order to assist the smooth and efficient functioning of privately negotiated derivatives activity involving Czech counterparties, and
2. in order to facilitate the process of amending the 1992 ISDA Master Agreement to address more effectively certain aspects of Czech law which may affect a Czech Master Agreement or, in the case of a Czech Master Agreement between two Czech parties, to allow a Czech Master Agreement to be made subject to Czech law

have jointly worked out

draft documents covering this area. In an ideal situation four documents will exists (in both Czech and English language version):

• 1992 ISDA Master Agreement: parties may agree on the governing law – i.e. even Czech Law – in the Schedule; the Supplement and/or the Definitions can be annexed to the 1992 ISDA Master Agreement,
• Czech Supplement to the 1992 ISDA Master Agreement (PDF, 79.38 Kb): the draft predominantly suggests that the preferred way for dispute resolution shall be arbitration (see below);
• Czech Definitions (PDF, 80.94 Kb): the draft defines transactions, business day conventions (MAINLY THESE NEED TO BE CLARIFIED AMONG MARKET PARTICIPANTS), price sources and rounding conventions,
• Practice Notes (PDF, 44.29 Kb) to the Supplement and Definitions: the draft explains the rationale for the Supplement and Definitions.

FMA and CNB now address all banks and law-firms active in the OTC derivative market with a request to work out comments and suggestions to the presented draft documents:

• drafts will be distributed in Czech (on 4 May 2000) and in English (on 9 May 2000) through the internet sites of FMA (https://www.aciforex.cz) and CNB (http://www.cnb.cz),
• comments and suggestions are welcome by 19 June 2000, preferably by e-mail toradek.urban@cnb.cz and/or dnetusil@csob.cz,
• CNB and FMA shall organize a meeting in the week of 26 June 2000 where all unresolved issued should be settled,
• FMA shall assure that the agreed texts of the Supplement and of the Definitions correspond to [the documentation of] ISDA by 31 July 2000.