Template:Calculation agent versus determination agent: Difference between revisions

From The Jolly Contrarian
Jump to navigation Jump to search
No edit summary
No edit summary
Line 1: Line 1:
===The difference between the {{eqderivprov|Calculation Agent}} and the {{eqderivprov|Determining Party}}===
===The difference between the {{eqderivprov|Calculation Agent}} and the {{eqderivprov|Determining Party}}===
The {{eqderiv}} recognise that while most calculations could be performed by whoever is appointed {{eqderivprov|Calculation Agent}}, determination of a {{eqderivprov|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 {{eqderivprov|Hedging Party}} in theory (though rarely in practice<ref>If ''{{eqderivprov|Calculation Agent}} == [[Dealer]]'', and ''[[Dealer]] == {{eqderivprov|Hedging Party}}'', and ''{{eqderivprov|Hedging Party}} == {{eqderivprov|Determining Party}}'', then ''{{eqderivprov|Calculation Agent}} == {{eqderivprov|Determining Party}}''.
'''Why''': The {{eqderiv}} recognise that while most calculations could be performed by whoever is appointed {{eqderivprov|Calculation Agent}}, determination of a {{eqderivprov|Cancellation Amount}} is inextricably related to the [[hedge]] and —- especially where there is a [[Market Disruption Event - Equity Derivatives Provision|disrupted market]] – this is best to be calculated by the one whose problem it is to unwinding that hedge: namely, the {{eqderivprov|Hedging Party}}. In theory (though almost never in practice<ref>If ''{{eqderivprov|Calculation Agent}} == [[Dealer]]'', and ''[[Dealer]] == {{eqderivprov|Hedging Party}}'', and ''{{eqderivprov|Hedging Party}} == {{eqderivprov|Determining Party}}'', then ''{{eqderivprov|Calculation Agent}} == {{eqderivprov|Determining Party}}''.</ref>) the {{eqderivprov|Hedging Party}} might not be the {{eqderivprov|Calculation Agent}}.  
</ref>) the {{eqderivprov|Hedging Party}} might not be the {{eqderivprov|Calculation Agent}}.  


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}}.
'''When''': 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}}.


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]]”''.
'''Enter the lawyers''': 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 11:41, 13 April 2017

The difference between the Calculation Agent and the Determining Party

Why: 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 and —- especially where there is a disrupted market – this is best to be calculated by the one whose problem it is to unwinding that hedge: namely, the Hedging Party. In theory (though almost never in practice[1]) the Hedging Party might not be the Calculation Agent.

When: 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.

Enter the lawyers: 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.