83,240
edits
Template:Failure to pay procedure: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 8: | Line 8: | ||
:(i) The standard [[grace period]]s are set out in Section {{{{{1}}}|5(a)(i)}}. Be careful here: under a {{2002ma}} the standard is '''''one''''' {{isdaprov|Local Business Day}}. Under the {{1992ma}} the standard is '''''three''''' {{isda92prov|Local Business Day}}s. ''But check the {{{{{1}}}|Schedule}}'' because in either case this is the sort of thing that counterparties adjust: {{2002ma}}s are often adjusted to conform to the {{1992ma}} standard of three {{{{{1}}}|LBD}}s, for example. | :(i) The standard [[grace period]]s are set out in Section {{{{{1}}}|5(a)(i)}}. Be careful here: under a {{2002ma}} the standard is '''''one''''' {{isdaprov|Local Business Day}}. Under the {{1992ma}} the standard is '''''three''''' {{isda92prov|Local Business Day}}s. ''But check the {{{{{1}}}|Schedule}}'' because in either case this is the sort of thing that counterparties adjust: {{2002ma}}s are often adjusted to conform to the {{1992ma}} standard of three {{{{{1}}}|LBD}}s, for example. | ||
:(ii) So: once you have a clear, notified {{isdaprov|Failure to Pay or Deliver}}, you have to wait ''at least'' one and possibly three or more {{isdaprov|Local Business Day}}s before doing anything about it. Therefore you are on tenterhooks until the [[close of business]] '''T+2''' {{isdaprov|LBD}}s (standard {{2002ma}}), or '''T+4''' {{isda92prov|LBD}}s (standard {{1992ma}}). | :(ii) So: once you have a clear, notified {{isdaprov|Failure to Pay or Deliver}}, you have to wait ''at least'' one and possibly three or more {{isdaprov|Local Business Day}}s before doing anything about it. Therefore you are on tenterhooks until the [[close of business]] '''T+2''' {{isdaprov|LBD}}s (standard {{2002ma}}), or '''T+4''' {{isda92prov|LBD}}s (standard {{1992ma}}). | ||
:(iii) At the expiry of this [[grace period]], you finally have a fully operational {{{{{1}}}|Event of Default}}. Now Section {{isdaprov|6(a)}} gives you the right, by not more than 20 days’ notice<ref>See discussion on at Section {{{{{1}}}|6(a)}} about the silliness of that time limit.</ref> to designate an {{ | :(iii) At the expiry of this [[grace period]], you finally have a fully operational {{{{{1}}}|Event of Default}}. Now Section {{isdaprov|6(a)}} gives you the right, by not more than 20 days’ notice<ref>See discussion on at Section {{{{{1}}}|6(a)}} about the silliness of that time limit.</ref> to designate an {{{{{1}}}|Early Termination Date}} for all outstanding {{isdaprov|Transaction}}s. So, at some point in the next twenty days. | ||
:(iv) For this we go to Section {{{{{1}}}|6(e)}}, noting as we fly over it, that Section {{{{{1}}}|6(c)}} reminds us [[for the avoidance of doubt]] that even if the {{{{{1}}}|Event of Default}} which triggers the {{{{{1}}}|Early Termination Date}} evaporates in the meantime — these things happen, okay? — yon {{ | :(iv) For this we go to Section {{{{{1}}}|6(e)}}, noting as we fly over it, that Section {{{{{1}}}|6(c)}} reminds us [[for the avoidance of doubt]] that even if the {{{{{1}}}|Event of Default}} which triggers the {{{{{1}}}|Early Termination Date}} evaporates in the meantime — these things happen, okay? — yon {{{{{1}}}|Defaulting Party}}’s goose is still irretrievably cooked. | ||
*'''Determining {{isdaprov|Close-out Amount}}s'''<ref>Or their equivalents under the {{1992ma}}, of course.</ref> | |||
*'''Section {{{{{1}}}|6(e)}} notice''': The Section {{{{{1}}}|6(e)}} notice terminating all outstanding {{{{{1}}}|Transaction}}s may only be served after close of business at the expiry of the [[grace period]], so therefore the first day on which a termination notice following a failure to pay {{{{{1}}}|Event of Default}} can be effective under an {{isdama}} is T+3 ({{2002isda}}) or T+5 {{1992isda}}. | *'''Section {{{{{1}}}|6(e)}} notice''': The Section {{{{{1}}}|6(e)}} notice terminating all outstanding {{{{{1}}}|Transaction}}s may only be served after close of business at the expiry of the [[grace period]], so therefore the first day on which a termination notice following a failure to pay {{{{{1}}}|Event of Default}} can be effective under an {{isdama}} is T+3 ({{2002isda}}) or T+5 {{1992isda}}. | ||