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| {{csaanat|3(c)|2016}}Note here the {{vmcsaprov|Transferor}} can ask for an exchange, but the {{vmcsaprov|Transferee}} is not obliged to accept it. This is a fundamental provision of “title transfer”: once the {{vmcsaprov|Eligible Credit Support}} is delivered under a {{1995csa}}, the {{vmcsaprov|Transferee}} owns it absolutely. It only has to return {{vmcsaprov|Equivalent Credit Support}}. This is a special, [[ISDA ninja|legal ninja]]<ref>Oh, all right, and [[GMSLA ninja]], [[Repo ninja]] and other kinds of [[ninja]]s too.<ref> use of the word “[[equivalent]]”. It means “[[fungible]]”; ''exactly the same as ~''; not “broadly similar to ~”.
| | #redirect[[Transfers, Calculations and Exchanges - VM CSA Provision]] |
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| This is important also from a pricing (and operational) perspective: otherwise the {{vmcsaprov|Transferor}} would have a “worst-of” [[option]] and would be entitled to continually switch into the "cheapest to deliver" of the {{vmcsaprov|Eligible Credit Support}}. Needless to say, the increased collateral flows would also increase the operational burden.
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| '''{{vmcsaprov|Delivery Amount}}s''': Contrast this with {{vmcsaprov|Delivery Amounts}}, where a {{vmcsaprov|Transferor}} has the [[cheapest to deliver|option to deliver the cheapest]] of the {{vmcsaprov|Eligible Credit Support}} specified in the {{1995csa}}.
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| '''{{vmcsaprov|Return Amount}}s''': A {{vmcsaprov|Transferee}} does have a (limited) option in terms of selecting the {{vmcsaprov|Return Amount}} should there be a requirement to return posted [[credit support]]: it can select the cheapest to deliver of all the {{vmcsaprov|Eligible Credit Support}} that has been posted to it which currently comprises its {{vmcsaprov|Credit Support Balance}}.
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Latest revision as of 18:34, 5 May 2024