APAC Additional Provisions (With Eliza Sleight)

Now, because we're talking about additional provisions, we use those for specific jurisdictions or counterparty types, and often they will take a lot more time to negotiate.

But can you tell us, um, a little bit more about why do we need those, and why do we put them in tra- into trading agreements such as ISDAs or, or GYMRA or any other, uh, agreement?

Absolutely, and thank you, Rali.

That's a really good place to start.

The simplest way to put it is that our standard master agreement, no matter what the trading document is, as you said, it could be an ISDA, a GYMRA, a GYMSLA, they are all drafted on the assumption that the agreement is for a UK or for a US corporate.

Those assumptions don't hold up in all jurisdictions or for all entity types.

Additional provisions, or APs, are jurisdiction-specific clauses that we add to the standard document to make sure that the contract is genuinely enforceable under the law of where the counterparty's based.

The base documents are globally standardized, and every document starts from a common framework, but jurisdictions vary massively, and the standard wording often doesn't fit the local requirements.

So in short, APs are how we bridge that gap wherever bespoke language is needed to make the document work locally.

You're absolutely right that they can be the most heavily negotiated part of the agreement.

These provisions sit exactly where local law, um, and our standard framework diverge most.

So on topics like netting, insolvency and tax, naturally they attract scrutiny from both sides.

Each party's trying to protect its own position under a legal regime that the base document didn't originally account for.

So without these provisions, we can undermine the protections that the master agreement is supposed to deliver on.

Most importantly, close out netting, which is what lets us measure exposure on a net rather than a gross basis.