For Immediate Release
For More Information Contact:
The Annex provides terms that apply to transactions
involving the purchase or sale of physical gas or options on physical gas. It
permits users to bring such trades under their ISDA Master Agreement
architecture and to elect to incorporate existing credit support arrangements.
Users may also elect the product-specific physical delivery terms, which follow
those provisions in the NAESB documentation.
“The Annex enables
participants to document their North American physical gas trades in a manner
that is consistent with two recognized industry standards, the ISDA and the
NAESB,” said Steven Bunkin, Vice President and Associate General Counsel,
Goldman, Sachs & Co/J. Aaron & Company and Chair of ISDA's North
American Energy, Commodities and Developing Products Committee. “Through the
use of this Annex, market participants will be able to have credit terms and
conditions negotiated in relation to an ISDA Master Agreement apply to their
physical gas transactions, while ensuring that generally accepted industry
terms will govern transactions in this growing market. The adoption of the
Annex will promote greater efficiency in the marketplace.”
During the drafting process, ISDA consulted NAESB,
which adopted
the final document as a ‘NAESB Model’ agreement. NAESB has also produced a
short User's Guide to the Annex.
“When two
organizations come together and share their expertise, as NAESB and ISDA have
done, the industry benefits tremendously,” said Rae McQuade, Executive Director
of NAESB.
ISDA is the global trade
association representing leading participants in the privately negotiated
derivatives industry. ISDA was chartered in 1985, and today has more than 600
member institutions from 46 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.
NAESB, formed in January 2002, is an independent and voluntary North American organization that develops and promotes the use of business practices and electronic communications standards for the wholesale and retail natural gas and electricity industries. NAESB is the successor to and is modeled after the Gas Industry Standards Board, which was established in 1994 and now constitutes the wholesale gas quadrant of NAESB. NAESB is accredited by the American National Standards Institute (ANSI) as a standards development organization. NAESB’s members include over 350 companies and organizations that participate actively in the retail and wholesale natural gas and electricity markets. For more information, visit: www.naesb.org.
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