What Are the Primary Differences between an ISDA Master Agreement and a Traditional Futures Account Agreement?
An ISDA Master Agreement is designed for over-the-counter (OTC) derivatives, focusing on bilateral counterparty risk, credit support, and close-out netting. A traditional futures account agreement is for exchange-traded derivatives, where the Central Counterparty (CCP) mitigates most of the counterparty risk.
The futures agreement primarily outlines margin requirements and the broker-client relationship, relying on the exchange's rules for netting and default management.
