For More Information, Please Contact:
Scott Marra, ISDA Press Office,
The Global Physical Coal Annex is
intended to facilitate the purchase or sale of physical coal (sourced in the
The Coal Annex was developed to
standardize terms and to increase liquidity in the growing global physical coal
trading market; expansion that has occurred as a result of the fact that coal
is seen as a reliable alternative to rising energy costs. The Coal Annex will
also allow market participants to enter into physical coal transactions, other
physical commodity transactions and financial derivatives under one master
agreement and will enable these contracts to be netted under the netting
provisions of the
In order to ensure broad acceptance amongst current industry practitioners, ISDA based the new Coal Annex on the Coal Trading Association’s (CTA) Master Coal Purchase and Sale Agreement for US sourced coal; the Edison Electric Institute’s (EEI) Coal Annex to the EEI Master Power Purchase and Sale Agreement, also for US coal; and globalCOAL’s Standard Coal Trading Agreement (SCoTA®) (for coal sourced outside the US) each of which is already in use in the coal markets.
Of particular note is the global scope of the Coal Annex in that it offers users the option to document US Coal under Appendix 1 and International Coal under Appendix 2. Appendix 2 incorporates by reference SCoTA terms including globalCOAL’s Relevant Standard Specifications which set out terms, conditions and quality standards based on local port rules.
ISDA, which represents participants in the privately negotiated derivatives industry, is the largest global financial trade association, by number of member firms. ISDA was chartered in 1985, and today has approximately 780 member institutions from 54 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.