Template:M summ Equity Derivatives 12.9: Difference between revisions

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Latest revision as of 14:42, 17 May 2022

Market Disruption Events vs Additional Disruption Events showdown

In a Nutshell:

So the two are independent: one is where you want to carry on; one where you don’t. So you don't have to wait for a period of Exchange Disruption before invoking a Hedging Disruption, and conversely you could — in theory at any rate — designate an Exchange Disruption even if there were no Hedging Disruption in existence.

Now in point of fact, an Exchange Disruption — especially a long one — usually will count as a Hedging Disruption which might be why the Consequences of Disrupted Days wording in Section 6.6 seems to run out of enthusiasm for its own existence, as if ISDA’s crack drafting squad™ suddenly realised the whole world is futile and threw in the towel. After all, if there have been eight straight Disrupted Days, the likelihood that one or other party hasn’t canned the Transaction on the grounds of Hedging Disruption must be pretty low.

Additional Disruption Events dans une Nutshell

The important Additional Disruption Events are the Triple Cocktail: Change in Law, Hedging Disruption and Increased Cost of Hedging. They have marginally different play-out rights:

Okay, okay, I hear you — LOSB and ICOSB are important too. For those:

Insolvency Filing and Failure to Deliver ... well — are they even applied in your confirm?