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{{ | {{isdaanat|6(a)}} | ||
{{isdaprov|Automatic Early Termination}} is an odd and misunderstood concept which exists in Section {{isdaprov|6(a)}} {{isdaprov|Right to Terminate Following Event of Default}} of the {{isdama}}. As is so much in the {{isdama}}, it’s all about '''[[Netting]]'''. Where a jurisdiction suspends terms of contracts in a period of formal insolvency, the idea is to have the ISDA break before that suspension kicks in — so close-out netting works. | |||
{{isdaprov|AET}} is only triggered by certain events under the {{isdaprov|Bankruptcy}} [[Events of Default - ISDA Provision|event of default]] | {{isdaprov|AET}} is thus only triggered by ''certain'' events under the {{isdaprov|Bankruptcy}} [[Events of Default - ISDA Provision|event of default]] — formal bankruptcy procedures — and not by economic events that tend to indicate insolvency (such as an inability to pay debts as they fall due, [[technical insolvency]] or the exercise of security. Nor does it apply to other Events of Default. | ||
{{automaticearlytermination}} | {{automaticearlytermination}} | ||
===[[AET]] under the {{1987ma}}=== | ===[[AET]] under the {{1987ma}}=== | ||
Note the somewhat difficult position for AET under the {{1987ma}} - a fuller discussion at that article - which was part of the reason for the move to the {{1992ma}} in the first place. | Note the somewhat difficult position for {{tag|AET}} under the {{1987ma}} - a fuller discussion at that article - which was part of the reason for the move to the {{1992ma}} in the first place. | ||
{{seealso}} | {{seealso}} | ||
*{{isdaprov|Right to Terminate Following Event of Default}} | *{{isdaprov|Right to Terminate Following Event of Default}} |