Remedies for Failure to Transfer or Accept after Cessation of Suspension Event - EFET Allowance Provision: Difference between revisions
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Latest revision as of 13:12, 16 April 2024
2007 EFET General Agreement
Version 2.1(a) (Power) A Jolly Contrarian owner’s manual™ Go premium
Crosscheck:
Failure to Transfer or Accept in a Nutshell™
Original text
Comparison See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs
Resources and Navigation
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Comparisons
Just what happens if, without excuse, a Delivering Party fails to deliver, or a Receiving Party fails to accept delivery of, Allowances is a key part of any self-respecting emission allowances trading document. Though each Carbon Squad approaches it in its own charmingly idiosyncratic way, the good ninjas of ISDA, EFET and IETA broadly get to the same place. Broadly.
The provisions are these:
ISDA: Sections (d)(ii) (Failure to Deliver)
EFET: Clause 8.5 (Remedies for Failure to Transfer or Accept after Cessation of Suspension Event)
IETA: Clause 12 (Transfer or Acceptance Failure)
Basics
When your Transaction gets to its end game, there are — absent unforeseen external events beyond the parties’ reasonable control, like Force Majeure, Suspension Events and Illegality — if the Delivering Party, or for that matter, the Receiving Party, just hasn’t come up with the required “goods” by the required time, how do things play out?
Each of the Master Agreements does things its own way, and as you might expect, the respective literature plays like a Myers Briggs assessment of the organisation’s personality.
Component | ISDA | EFET | IETA |
---|---|---|---|
Cure Period to remedy | Yes: Final Delivery Date (2 days hence) | yes, through 2 day grace period | Yes: to Final Delivery Date (2 days hence) |
EEP/No EEP alternatives | Yes | Yes | Yes |
Replacement Costs | Delivering Party’s Replacement Cost/Receiving Party’s Replacement Cost | Buyer’s Cover Costs/Seller’s Cover Costs | Delivering Party’s Replacement Cost/Receiving Party’s Replacement Costs |
No EPP Replacement Cost calculation | Example | Min [0, Price Increase on Failed Allowances + Transaction Costs + Accrued Interest] | Example |
EPP Replacement Cost calculation | Example | Example | Example |
Interest accrual basis | Example | Confusing. There are different accrual rates for the grace period and the default period, and interest seems to accrue during the grace period on the whole value of the undelivered Allowances, not just any price differential against the Traded Price. | Example |
Example | Example | Example | Example |
Example | Example | Example | Example |
Example | Example | Example | Example |
Example | Example | Example | Example |
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See also
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