Template:Calculation agent versus determination agent: Difference between revisions

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(Created page with "===The difference between the {{eqderivprov|Calculation Agent}} and the {{eqderivprov|Determining Party}}=== The {{eqderiv}} recognise that while most calculations could be pe...")
 
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</ref>) the {{eqderivprov|Hedging Party}} might not be the {{eqderivprov|Calculation Agent}}.  
</ref>) the {{eqderivprov|Hedging Party}} might not be the {{eqderivprov|Calculation Agent}}.  


You might think the name of the game should be to avoid language like “determination or calculation, [[as the case may be]], made (respectively) by the Calculation Agent or Determining Party, [[as the case may be]]” throughout your confirmation, since that helps no one except my brethren in the [[Mediocre lawyer|legal profession]].
The {{eqderivprov|Determining Party}} only ever has to determine a {{eqderivprov|Cancellation Amount}}, {{eqderivprov|Cancellation and Payment}} or {{eqderivprov|Partial Cancellation and Payment}} under {{eqderivprov|12.8}}, and that will only happen in only when a Transaction terminates following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}.


The Determining Party thus only comes into play to determine a {{eqderivprov|Cancellation Amount}}, {{eqderivprov|Cancellation and Payment}} or {{eqderivprov|Partial Cancellation and Payment}} under {{eqderivprov|12.8}}. This will generally happen in only when a Transaction terminates following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}.
Nevertheless, this is all the opportunity my brethren in the [[Mediocre lawyer|legal profession]]need  to confect, and spray-hose all over your confirmation, language like ''“determination or calculation, [[as the case may be]], made (respectively) by the Calculation Agent or Determining Party, [[as the case may be]]”''.

Revision as of 11:38, 13 April 2017

The difference between the Calculation Agent and the Determining Party

The Equity Derivatives recognise that while most calculations could be performed by whoever is appointed Calculation Agent, determination of a Cancellation Amount is inextricably related to the hedge usually where there is a disrupted market – and this is best to be calculated by the person whose problem it is unwinding that hedge: the Hedging Party in theory (though rarely in practice[1]) the Hedging Party might not be the Calculation Agent.

The Determining Party only ever has to determine a Cancellation Amount, Cancellation and Payment or Partial Cancellation and Payment under 12.8, and that will only happen in only when a Transaction terminates following an Extraordinary Event or an Additional Disruption Event.

Nevertheless, this is all the opportunity my brethren in the legal professionneed to confect, and spray-hose all over your confirmation, language like “determination or calculation, as the case may be, made (respectively) by the Calculation Agent or Determining Party, as the case may be”.

  1. ↑ If Calculation Agent == Dealer, and Dealer == Hedging Party, and Hedging Party == Determining Party, then Calculation Agent == Determining Party.
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