Template:M summ 2016 CSA Other CSA: Difference between revisions
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See also Paragraph {{csaprov|1(b)}}, which expounds itself thus: | [[Other CSA - VM CSA Provision|See]] also Paragraph {{csaprov|1(b)}}, which expounds itself thus: | ||
:''{{ISDA English Law Credit Support Annex 2016 1(b)}}'' | :''{{ISDA English Law Credit Support Annex 2016 1(b)}}'' | ||
{{Other CSA commentary}} | {{Other CSA commentary}} | ||
Note also, that a [[credit support annex]] is not, by any lights, a {{isdaprov|Credit Support Document}} — rather it is a {{isdaprov|Transaction}} in its own right under the {{isdama}} — so this is unusually slap-dash work from {{icds}}. | Note also, that a [[credit support annex]] is not, by any lights, a {{isdaprov|Credit Support Document}} — rather it is a {{isdaprov|Transaction}} in its own right under the {{isdama}} — so this is unusually slap-dash work from {{icds}}. | ||
Latest revision as of 16:10, 19 April 2021
See also Paragraph 1(b), which expounds itself thus:
- 1(b) Scope of this Annex and the Other CSA: The only Transactions which will be relevant for the purposes of determining “Exposure” under this Annex will be the Covered Transactions specified in Paragraph 11. Each Other CSA, if any, is hereby amended such that the Transactions that will be relevant for purposes of determining “Exposure” thereunder, if any, will exclude the Covered Transactions and the Transaction constituted by this Annex. Except as provided in Paragraph 9(h), nothing in this Annex will affect the rights and obligations, if any, of either party with respect to “independent amounts” or initial margin under each Other CSA, if any, with respect to Transactions that are Covered Transactions.
But what does it mean?
This “Other CSA” talk has in mind those who, in 2016, wished to “grandfather” Transactions which were already live when the regulatory margin obligations came into force, but which therefore preceded it and were out of scope for it.
Cue a monstrously painful dual-CSA regime where new transactions were margined under a new, regulatory margin-compliant 2016 VM CSA, and old ones were allowed to roll off on the clapped-out (but somehow better, right?) “other” 1995 CSA.
No doubt this made sound commercial sense in 2016. But a few years later, for all except those with 30-year inflation swaps on the books, all this “Other CSA” chat is just barnacle-encrusted confusion for everyone.
Note also, that a credit support annex is not, by any lights, a Credit Support Document — rather it is a Transaction in its own right under the ISDA Master Agreement — so this is unusually slap-dash work from ISDA’s crack drafting squad™.