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| A hodge-podge of “state the bleeding obvious” rules, breach of some of which justifies (eventual) close-out as a “breach of agreement” — flagrantly breaking the law, carelessly losing one’s regulatory authorisations — and random tax provisions and indemnities, which by and large ''don’t'' justify close-out.
| | {{isda 4 summ|isdaprov}} |
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| '''Section {{isdaprov|4(a)}}''': {{specified information capsule|isdaprov}}
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| '''Section {{isdaprov|4(b)}}''': {{isda 4(b) summ|isdaprov}}
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| '''Section {{isdaprov|4(c)}}''': Hardly controversial that one must obey the law, but note this apparently inoffensive [[covenant]] converts that general public obligation into a [[Contractual damages|private civil one]], with definitive commercial consequences to your counterparty, hence the couching of the language in terms of materiality (twice) and specific ability to perform obligations under the {{isdama}}.
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| '''Section {{isdaprov|4(d)}}''': These [[reps]] allow the other party to pay without [[Withholding tax|deduction]] for certain taxes. This [[covenant]] puts the onus on the payee (beneficiary) to ensure the other party (who is subject to the authority of the taxing authority in question) is not erroneously passing through moneys that it should withhold and for which it will be personally liable to account to the tax authority. It also gives the aggrieved payer a direct right of action to claim those amounts back off the forgetful payee.
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| '''Section {{isdaprov|4(e)}}''': Basically, if there is any {{isdaprov|Stamp Tax}} imposed because of my existence or residence in a certain jurisdiction, whether imposed on me or you, I’ll pay it, unless it would have been imposed on you too. If we’re both in the same {{isdaprov|Stamp Tax Jurisdiction}}, the liability lies where it falls.
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Latest revision as of 16:57, 13 October 2023
A hodge-podge of “state the bleeding obvious” rules, breach of some of which justifies (eventual) close-out as a “breach of agreement” — agreeing to provide the credit information you have patiently listed in your schedule, flagrantly breaking the law, carelessly losing one’s regulatory authorisations — and random tax provisions and indemnities (providing the necessary tax forms to minimise tax, and pay tax if you don’t).
These are the dull agreements — which by and large don’t justify close-out.