Template:M comp disc EFET Allowance Annex 7.1: Difference between revisions

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[[Force Majeure - EFET Allowance Provision|Functionally]], the definitions of {{efetaprov|Force Majeure}} in the EFET and IETA versions, and {{euaprov|Settlement Disruption Event}} in the {{euadefs}} are the same.
{{emissions comparison|{{euaprov|Settlement Disruption Event}}|{{efetaprov|Force Majeure}}|{{ietaprov|Force Majeure}}}}
 
{{emissions force majeure overview|efetaprov}}
Here is a {{diff|77069|77068}} between IETA and EFET, and here is a {{diff||}} between EFET and ISDA.
 
The differences are to account for the architecture and nomenclature of the different master agreements, though the IETA has a conflict clause favouring Suspension Event over Force Majeure/Settlement Disruption Event, which the EFET does not.
 
The equivalent under the {{emissionsannex}} is the {{euaprov|Settlement Disruption Event}} — so called because there is already a Force Majeure under the {{isdama}} so the ’squad had to call their version something else.
 
Here, for good order, is a {{diff|77096|77095}} between {{efetaprov|Force Majeure}} under the {{efetannex}} and {{euaprov|Settlement Disruption Event}} under the {{emissionsannex}}.

Latest revision as of 15:10, 19 October 2023

The same broad concept is dealt with as follows:

Functionally, the definitions of “Force Majeure” under Clause 7.1 the EFET Annex and Clause 13 of the IETA, and the definition of “Settlement Disruption Event” under (d)(i)(4) of the ISDA Emissions Annex are the same — here is a comparison between IETA and EFET, and here is a comparison between EFET and ISDA — so you do wonder whose idea it was to call it something different.

Let us speculate: the IETA was written first, is independent of the ISDA universe, and for reasons best known to IETA’s crack drafting squad™, they decided to call this a “Force Majeure”. Being an event beyond the reasonable control of the affected party there is some logic to this.

ISDA’s crack drafting squad™ was, as usual, late to the “novel asset class” party and, as it couldn’t find a spot, decided to park its tanks on IETA’s lawn, borrowing much of the technology wholesale but unable to call this event a Force Majeure because the ISDA Master Agreement already has a Force Majeure Event, this is quite different — for whatever reason, the timings are a lot longer — and that would confuse people even beyond ISDA’s tolerance for confusing people.[1]

So ISDA’s crack drafting squad™ went with its product specific “stuff happens” label, “Settlement Disruption Event”. In any case, to make your lives easier, “Force Majeure - Emissions Annex Provision” redirects to Settlement Disruption Event. The JC’s nice like that.

The differences are to account for the architecture and nomenclature of the different master agreements, though the IETA has a conflict clause favouring Suspension Event over Force Majeure/Settlement Disruption Event, which the EFET does not.

  1. ↑ Seeing as the IETA Master Agreement borrows technology from the 1992 ISDA is is conceivable that IETA’s crack drafting squad™ didn’t realise there was a Force Majeure Event in the 2002 ISDA, as there was not one in the 1992 ISDA. I am guessing.
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