Template:M comp disc 2002 ISDA 6(e): Difference between revisions

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{{ISDA 2002 Section 6(e) TOC}}
{{isda 6(e) comp|isdaprov}}
 
{{isdaprov|Early Termination Amount}} is not actually defined in the {{1992ma}}, but is referred to obliquely in Section {{isdaprov|6(e)}} as:
 
:''...The amount, [[if any]], payable in respect of an {{isdaprov|Early Termination Date}} and determined pursuant to this Section ...''
 
Correctly, it is best referred to as a “Section {{isdaprov|6(e)}} Amount” under the {{1992ma}}, although of course everyone does call it the ''{{isdaprov|Early Termination Amount}}''.  This inevitability was recognised in the {{2002ma}}, where it is defined in Section {{isdaprov|6(e)}} as follows:
:''... the amount, if any, payable in respect of that {{isdaprov|Early Termination Date}}.''
 
But the {{2002ma}} also has a “{{isdaprov|Close-out Amount}}”, so you may want to know what is {{isdaprov|the difference between the Early Termination Amount and the Close-out Amount}}. Yes? ''[[The difference between the Early Termination Amount and the Close-out Amount - ISDA Provision|Go on, then!]]''

Latest revision as of 17:02, 1 January 2024

Compare with Close-out Amount under the 2002 ISDA

The 1992 ISDA close-out methodology is hideous. They overhauled whole process of closing out an ISDA, soup to nuts, in the 2002 ISDA, and is now much more straightforward — as far as you could ever say that about ISDA’s crack drafting squad™’s output. But a large part of the fanbase — that part west of Cabo da Roca — sticks with the 1992 ISDA. Odd.

Differences, in very brief:

The 1992 ISDA has the infamous Market Quotation and Loss measures of value, and the perennially-ignored First Method and the more sensible Second Method means of evaluating the termination value of terminated Transactions. The 2002 ISDA has just the Close-out Amount to cover everything. So while the 1992 ISDA is far more elaborate and over-engineered, this is not to deny that the 2002 ISDA is elaborate or over-engineeered.

The 2002 ISDA has a new Section 6(e)(iv) dealing with Adjustment for Illegality or Force Majeure Event. This wasn’t needed in the 1992 ISDA, which didn’t have Force Majeure Event at all, and a less sophisticated Illegality.

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