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| The actual wording is in the info box lower down on the right-hand side, but you may find it easier to read the nutshell summary, since in its 2016 version CSA ISDA not only passed up the opportunity to make this unused-in-practice language simpler, but bloody-mindedly made it worse, by providing anally-retentive alternatives for {{2002isda}} and {{1992isda}} close-out methodologies. Which is just spectacular.
| | #redirect[[Dispute Resolution - CSA Provision]] |
| {{Nuts|4(a)|1995 CSA}}<br>
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| {{csaprov|Disputed Calculations or Valuations}} is a topic that could unfurl like the flower of a deadly insect-eating nightshade if you let it. DON’T LET IT.
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| {{fullanatopen|csa|
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| {{csasnap|4(a)|1995}}
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| {{csasnap|4(a)|2016}}
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| }}
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| The dispute can be as to one of two things:
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| *The {{csaprov|Value}} of posted (or to-be-transferred) {{csaprov|Eligible Credit Support}}; or
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| *The {{isdaprov|Transaction}} {{csaprov|Value}} (when calculating {{csaprov|Exposure}}).
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| Let's take the easy one first: {{csaprov|Eligible Credit Support}}. If you are a smart sort of fellow who has moved onto a cash-only single-currency {{2016csa}} then there’s not really much to argue about. What is the {{csaprov|Value}}, in the {{csaprov|Base Currency}}, of an amount in the {{csaprov|Base Currency}}?
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| The {{isdaprov|Transaction}} {{isdaprov|Exposure}} has —potentially — a different complexion. While some asset classes ([[FX]], [[synthetic equity]]) are pretty observable and, in the same way, there is not much to argue about, others are not. The less liquid a transaction is, the less 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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| So 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 aspirations for what Third party {{isdaprov|Reference Market-Makers}} will be prepared to do to help a fellow market participant out. It depends on the better angels of a {{isdaprov|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 a {{isdaprov|Reference Market-maker}} doesn’t ''have'' a better nature. Such a chap is certain not to provide a quote, which brings them no benefit (they can’t get a trade out of it).
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| ''[to be continued]''
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