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| {{Nuts|4(a)|1995 CSA}}<br>
| | #redirect[[Dispute Resolution - CSA Provision]] |
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| A topic that could unfurl like the flower of a deadly insect-eating nightshade if you let it. The
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| The dispute can be a valuation of two things:
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| *The {{isdaprov|Transaction}} value (when calculating {{csaprov|Exposure}}); or
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| * or the Value of posted collateral (or to-be-transferred {{csaprov|Eligible Credit Support}}.
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| Let's take the easy one first: if you are a smart fellow and have moved to a cash-only single-currency {{2016csa}} then there's not really much to argue about in terms of the {{csaprov|Value}} of the posted credit support.
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| The Transaction exposure has a different complexion. Some asset classes ([[FX]], [[synthetic equity]]) are pretty observable, and again, there is not much to argue about.
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| Others are not - the less liquid they are, the more likely the broker is to refuse any dispute rights when carrying out its {{isdaprov|Calculation Agent}} function under the {{tag|ISDA}}.
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| But doesn't the self-help valuation model under the CSA drive a [[Coach & Horses|coach and horses]] through the carefully constructed {{isdaprov|Calculation Agent}} language on which the [[broker]] counterparty has just insisted, to the point of threatening to die in a ditch about it?
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| It may seem so, but in practice no. Firstly, the dispute mechanism in the CSA, while fulsome, reflects the uncynical attitude of yesteryear in its asiprations for what third parties will be prepared to do. it depends on the better angels of a {{csaprov|Reference Market-maker}}’s nature — neigh, ''four'' of the blighters — in providing firm quotations to be dissected, arithmetically averaged and arranged for the delight of all. But a moment’s reflection should tell you that {{csaprov|Reference Market-makers}} don’t ''have'' a better nature. They are almost certain not to provide a quote, which brings them no benefit (they can’t get a trade out of it) and
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| - and for synthetic equity, FX etc that is pretty observable (just take the day's closing price)
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| which in this case is cash. so (a) the practical likelihood of dispute is low to nil and (b) the means of resolving set out in the CSA, though conceptually painful (prevailing on the better nature ofaveraging quotes and so on) in practice won’t work (precisely because ) and the default if nooine will give a quote is the Valuation Agent's calculation.
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| {{fullanatopen|csa|
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| {{csasnap|4(a)|1995}}
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| }}
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