Template:Nutshell 1992 ISDA Market Quotation: Difference between revisions

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“'''{{isdaprov|Market Quotation}}'''” means, when a party values any {{isdaprov|Terminated Transactions}}, an amount based of quotations from {{isdaprov|Reference Market-maker}}s (taking into account any {{isdaprov|Credit Support Document}} in favour of that party and subject to such documentation as such party and the {{isdaprov|Reference Market-maker}} may, in [[good faith]], agree) for the amount that the quoting {{isdaprov|Reference Market-maker}} would pay (expressed as a negative) or require (expressed as a positive) to enter into a transaction (the “'''{{isdaprov|Replacement Transaction}}'''”) preserving the economic equivalent of all payments and deliveries that would have been required afdter that date by the parties under Section {{isdaprov|2(a)(i)}} under the relevant {{isdaprov|Terminated Transactions}} had an {{isdaprov|Early Termination Date}} not been designated. For this purpose, {{isdaprov|Unpaid Amounts}} are excluded. The determining party will ask each {{isdaprov|Reference Market-maker}} to provide its quotation on or as soon as reasonably practicable after the relevant {{isdaprov|Early Termination Date}}. If more there are more than three quotations, the {{isdaprov|Market Quotation}} will be their average, disregarding the highest and lowest values. If three such quotations are provided, the {{isdaprov|Market Quotation}} will be the middle one. If there are fewer than three quotations the {{isdaprov|Market Quotation}} will be deemed unable to be determined. <br>
“'''{{isdaprov|Market Quotation}}'''” when valuing {{isdaprov|Terminated Transactions}}, will be based on quotations from {{isdaprov|Reference Market-maker}}s for the amount that those {{isdaprov|Reference Market-maker}}s would pay (expressed as a negative) or require (expressed as a positive) to enter into a “'''{{isdaprov|Replacement Transaction}}'''” preserving the economic equivalent of all remaining payments and deliveries after the {{isdaprov|Early Termination Date}} by the parties under the relevant {{isdaprov|Terminated Transactions}} had they not been terminated, excluding any {{isdaprov|Unpaid Amounts}}.  
 
Each {{isdaprov|Reference Market-maker}} must quote on or as soon as practicable after the {{isdaprov|Early Termination Date}} on the basis of such documentation as the determining party and the {{isdaprov|Reference Market-maker}} may in [[good faith]] agree, including as regards any {{isdaprov|Credit Support Document}}.  
 
If more than three {{isdaprov|Reference Market-maker}}s quote, the {{isdaprov|Market Quotation}} will be their average having disregarded the highest and lowest.  
If exactly three do, the {{isdaprov|Market Quotation}} will be the middle quotation.  
 
If ''fewer'' than three {{isdaprov|Reference Market-maker}}s quote, it will not be possible to determine a {{isdaprov|Market Quotation}} ''[and, to calculate the {{isdaprov|Settlement Amount}}, the determining party must value the affected {{isdaprov|Terminated Transactions}} by reference to the determining party’s {{isdaprov|Loss}}]''<ref>This last bracketed bit isn’t in the definition of {{isdaprov|Market Quotation}}, but this is the implication of how the {{isdaprov|Settlement Amount}} procedure works</ref>. <br>

Latest revision as of 08:26, 30 July 2019

“Market Quotation” when valuing Terminated Transactions, will be based on quotations from Reference Market-makers for the amount that those Reference Market-makers would pay (expressed as a negative) or require (expressed as a positive) to enter into a “Replacement Transaction” preserving the economic equivalent of all remaining payments and deliveries after the Early Termination Date by the parties under the relevant Terminated Transactions had they not been terminated, excluding any Unpaid Amounts.

Each Reference Market-maker must quote on or as soon as practicable after the Early Termination Date on the basis of such documentation as the determining party and the Reference Market-maker may in good faith agree, including as regards any Credit Support Document.

If more than three Reference Market-makers quote, the Market Quotation will be their average having disregarded the highest and lowest. If exactly three do, the Market Quotation will be the middle quotation.

If fewer than three Reference Market-makers quote, it will not be possible to determine a Market Quotation [and, to calculate the Settlement Amount, the determining party must value the affected Terminated Transactions by reference to the determining party’s Loss][1].

  1. ↑ This last bracketed bit isn’t in the definition of Market Quotation, but this is the implication of how the Settlement Amount procedure works
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