Termination Date - ISDA Definition: Difference between revisions
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On the {{isdadefsprov|Termination Date}} a {{isdaprov|Transaction}} terminates but that does not mean it winks out of existence entirely, in the sense that all existing and future rights and obligations under that {{isdaprov|Transaction}} cease to exist. Instead, it is the last day ''on which new obligations arise'' under the {{isdadefsprov|Swap Transaction}}: a [[coupon]] payable the day ''after'' the termination date is just not payable under the {{isdadefsprov|Swap Transaction}}. | |||
This isn’t any great surprise, of course. But existing rights and obligations under a {{isdaprov|Transaction}} continue to exist, and — for example, and subject to [[limitation period]]s and counter-claims and so on, if, a year after the {{isdadefsprov|Termination Date}}, it emerges that a payment date fell under it — this seems odd, but might arise as the result of a dispute subsequently resolved by litigation, or retrospective legislation — then this amount would still be payable. | |||
{{Effective date trade date termination date}} | |||
Latest revision as of 16:54, 30 September 2019
On the Termination Date a Transaction terminates but that does not mean it winks out of existence entirely, in the sense that all existing and future rights and obligations under that Transaction cease to exist. Instead, it is the last day on which new obligations arise under the Swap Transaction: a coupon payable the day after the termination date is just not payable under the Swap Transaction.
This isn’t any great surprise, of course. But existing rights and obligations under a Transaction continue to exist, and — for example, and subject to limitation periods and counter-claims and so on, if, a year after the Termination Date, it emerges that a payment date fell under it — this seems odd, but might arise as the result of a dispute subsequently resolved by litigation, or retrospective legislation — then this amount would still be payable.
The Effective Date is the day when everything starts for real on a Transaction — at which point payments start happening, Calculation Period begin to run and so on. To be contrasted with the Trade Date, being the date when traded and went “on risk” — at that point you struck your prices (Initial Price, Strike Price, so on).
So the sequence is Trade Date, Effective Date — — and Termination Date.