The Captain`s Agreement is a document agreed between two parties, which sets standard conditions for all transactions between these parties. Each time a transaction is concluded, the terms of the framework agreement should not be renegotiated and applied automatically. An ISDA master contract is the standard document that is regularly used to regulate over-the-counter derivatives transactions. The agreement, published by the International Swaps and Derivatives Association (ISDA), outlines the conditions to be applied to a derivatives transaction between two parties, usually to a derivatives trader and counterparty. The master contract of the ISDA itself is the norm, but it is accompanied by a bespoke timetable and sometimes an annex to support the credit, both signed by both parties in a given transaction. At the same time as the timetable, the framework agreement defines all the general conditions necessary for the proper distribution of the risks of transactions between the parties, but does not contain specific terms and conditions for a particular transaction. Once the framework agreement has been concluded, the parties can enter into numerous transactions by agreeing to the essential terms and conditions over the telephone, as confirmed in writing, without the need to re-consider the terms of the framework agreement. The use of one or more credit support documents is optional, but is common in masteragrements for OTC derivatives transactions. Credit support documents are added when the parties wish to provide for the exchange of security when the risk (in the derivatives covered by the credit support document) of part of the other party exceeds an agreed amount. Credit support documents contain provisions relating to the posting and return of collateral, the types of guarantees that can be used, and the treatment of collateral by the beneficiary. “All transactions are concluded on the basis that this master contract and all confirmations form a single agreement between the parties …

and the parties would not make transactions otherwise. Most multinational banks have ISDA master`s agreements. These agreements generally apply to all branches engaged in currency, interest rate or option trading. Banks require counterparties to sign an exchange agreement. Some also require exchange agreements. While the ISDA master contract is the norm, some of its terms and conditions are changed and defined in the accompanying schedule. The schedule is negotiated, either to cover (a) the requirements of a given hedging transaction or (b) a current business relationship.