How Does a ‘Master Confirmation’ Agreement Help Reduce Operational Settlement Risk?
A Master Confirmation standardizes the commercial terms for a series of similar derivatives trades executed under a single Master Agreement (like ISDA). By pre-agreeing on standardized terms, it reduces the need for lengthy, individual confirmations for every trade.
This minimizes the risk of errors, misinterpretations, and delays in the post-trade processing and settlement phase, thus lowering operational settlement risk.
