Poland

Derivatives in Poland: Polish Framework Agreement recommended by the Union of Polish Banks

Privately negotiated derivatives transactions are normally documented under master agreements. The key provisions of such master agreements are the so-called ‘single agreement’ provisions and provisions on netting (in particular on close-out netting). Whereas the ISDA Master Agreement (both Multicurrency - Cross Border and Local Currency - Single Jurisdiction) (the “ISDA Master Agreement” ) prepared by the International Swaps and Derivatives Association Inc. (“ISDA”) is the most popular market standard, there exist also some local master agreements substantially resembling the ISDA Master Agreement standard. This article looks at the Polish Framework Agreement prepared under the auspices of the Union of Polish Banks ( Zwi1zek Banków Polskich, ZBP) (the “Framework Agreement” ) and discusses distinctions and similarities with the ISDA Master Agreement. The popularity of the Framework Agreement is increasing and it may be expected that it will be very popular on the local market in Poland. Many banks, including those of multinational origin, are using this standard or are contemplating starting to use it in Poland. Its popularity will be even higher bearing in mind that it is recommended by the biggest industry association - ZBP, which includes amongst its members many of the international banks present through their subsidiaries in Poland.