Template:EUA Annex Receiving Party’s Replacement Cost: Difference between revisions
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'''{{euaprov|Receiving Party’s Replacement Cost}}''' means: | '''{{euaprov|Receiving Party’s Replacement Cost}}''' means: | ||
:(1) if “{{euaprov|Excess Emissions Penalty}}” is specified not to be applicable in the Annex to this Part | :(1) if “{{euaprov|Excess Emissions Penalty}}” is specified not to be applicable in the Annex to this Part or the {{isdaprov|Confirmation}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}, or if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable and if an {{euaprov|EEP Risk Period}} is specified in the Annex to this Part or in the {{isdaprov|Confirmation}} for the relevant {{euaprov|EU Emissions Allowance Transaction}} but the {{euaprov|Delivery Date}} falls outside the {{euaprov|EEP Risk Period}} then, in respect of a failure to deliver a number of Allowances (the “'''{{euaprov|RPRC Shortfall}}'''”), an amount equal to: | ||
::(A) | ::(A) | ||
:::(I) the price (per Allowance) that {{euaprov|Receiving Party}}, acting in a commercially reasonable manner, does or would, in the determination of the Calculation Agent, pay in an arm’s length transaction concluded on the {{euaprov|Final Delivery Date}} for an equivalent number of Allowances to be delivered on the {{euaprov|Final Delivery Date}} or, if later, the {{euaprov|Delivery Business Day}} on which Allowances would be delivered in accordance with prevailing market practice under a spot transaction concluded on the {{euaprov|Final Delivery Date}}; less | :::(I) the price (per Allowance) that {{euaprov|Receiving Party}}, acting in a commercially reasonable manner, does or would, in the determination of the Calculation Agent, pay in an arm’s length transaction concluded on the {{euaprov|Final Delivery Date}} for an equivalent number of Allowances to be delivered on the {{euaprov|Final Delivery Date}} or, if later, the {{euaprov|Delivery Business Day}} on which Allowances would be delivered in accordance with prevailing market practice under a spot transaction concluded on the {{euaprov|Final Delivery Date}}; less | ||
:::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, as set out in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} plus, in those circumstances in which the relevant termination of the parties’ obligations under | :::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, as set out in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} plus, in those circumstances in which the relevant termination of the parties’ obligations under “{{euaprov|Physical Settlement}}” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by: | ||
::(B) the {{euaprov|RPRC Shortfall}}; plus | ::(B) the {{euaprov|RPRC Shortfall}}; plus | ||
::(C) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date of termination in accordance with Part [7](d)(ii)(1)(B)(Failure to Deliver Not Remedied) on an amount equal to the product of the {{euaprov|RPRC Shortfall}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (1)(A)(I) above over the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable; or | ::(C) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date of termination in accordance with Part [7](d)(ii)(1)(B)(Failure to Deliver Not Remedied) on an amount equal to the product of the {{euaprov|RPRC Shortfall}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (1)(A)(I) above over the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable; or | ||
:(2) if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable in the Annex to this Part | :(2) if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable in the Annex to this Part or the {{euaprov|Confirmation}} for an {{euaprov|EU Emissions Allowance Transaction}} and, if an {{euaprov|EEP Risk Period}} is specified in the Annex to this Part or in the {{isdaprov|Confirmation}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}, the {{euaprov|Delivery Date}} falls within the {{euaprov|EEP Risk Period}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}, then, in respect of a failure to deliver a number of Allowances (the “'''{{euaprov|Undelivered Allowances}}'''”), an amount equal to the sum of: | ||
::(A) either: | ::(A) either: | ||
:::(I) if in one or more arm’s length transactions {{euaprov|Receiving Party}} is able, using its reasonable endeavours, to purchase a number of Allowances to be delivered during the period from (but excluding) the {{euaprov|Final Delivery Date}} to (and including) the {{euaprov|Reconciliation Deadline}} on or immediately following the {{euaprov|Delivery Date}} (the | :::(I) if in one or more arm’s length transactions {{euaprov|Receiving Party}} is able, using its reasonable endeavours, to purchase a number of Allowances to be delivered during the period from (but excluding) the {{euaprov|Final Delivery Date}} to (and including) the {{euaprov|Reconciliation Deadline}} on or immediately following the {{euaprov|Delivery Date}} (the “'''{{euaprov|Buy-In Period}}'''”), which in respect of each such individual purchase of Allowances, when aggregated with other such purchases, amounts to a purchase of a number of Allowances equal to the number of {{euaprov|Undelivered Allowances}}: | ||
::::(X) | ::::(X) | ||
:::::(1) the price (per Allowance) at which {{euaprov|Receiving Party}} is able so to purchase the relevant number of Allowances; less | :::::(1) the price (per Allowance) at which {{euaprov|Receiving Party}} is able so to purchase the relevant number of Allowances; less | ||
:::::(2) (A) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus, (B) in those circumstances in which the relevant termination of the parties’ obligations under | :::::(2) (A) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus, (B) in those circumstances in which the relevant termination of the parties’ obligations under “{{euaprov|Physical Settlement}}” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by: | ||
::::(Y) the number of Allowances to which such purchase relates; plus | ::::(Y) the number of Allowances to which such purchase relates; plus | ||
::::(Z) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date of termination in accordance with Part [7](d)(ii)(1)(B)(Failure to Deliver Not Remedied) on an amount equal to the product of the number of {{euaprov|Undelivered Allowances}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (2)(A)(I)(X)(1) above over the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable; or | ::::(Z) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date of termination in accordance with Part [7](d)(ii)(1)(B)(Failure to Deliver Not Remedied) on an amount equal to the product of the number of {{euaprov|Undelivered Allowances}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (2)(A)(I)(X)(1) above over the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable; or | ||
:::(II) if in one or more arm’s length transactions {{euaprov|Receiving Party}}, using its reasonable efforts, is unable to purchase a number of Allowances equivalent to the {{euaprov|Undelivered Allowances}} to be delivered during the Buy-In Period: | :::(II) if in one or more arm’s length transactions {{euaprov|Receiving Party}}, using its reasonable efforts, is unable to purchase a number of Allowances equivalent to the {{euaprov|Undelivered Allowances}} to be delivered during the Buy-In Period: | ||
::::(X) in respect of the number of Allowances for which {{euaprov|Receiving Party}} is able to effect a Buy-In during the Buy-In Period, an amount for such Allowances calculated in accordance with paragraph (I) above; and | ::::(X) in respect of the number of Allowances for which {{euaprov|Receiving Party}} is able to effect a Buy-In during the Buy-In Period, an amount for such Allowances calculated in accordance with paragraph (I) above; and | ||
::::(Y) in respect of a number of Allowances equal to the number of {{euaprov|Undelivered Allowances}} minus the number of Allowances referred to in (II)(X) above (the “{{euaprov|Shortfall}}”), the sum of: | ::::(Y) in respect of a number of Allowances equal to the number of {{euaprov|Undelivered Allowances}} minus the number of Allowances referred to in (II)(X) above (the “'''{{euaprov|Shortfall}}'''”), the sum of: | ||
:::::(a) | :::::(a) | ||
::::::(I) the price (per Allowance) at which {{euaprov|Receiving Party}}, using its reasonable efforts and in an arm’s length transaction, is able to purchase as soon as reasonably possible for delivery after the {{euaprov|Reconciliation Deadline}} a number of Allowances (such Allowances also being of the same {{euaprov|Allowance Type}} | ::::::(I) the price (per {{euaprov|Allowance}}) at which {{euaprov|Receiving Party}}, using its reasonable efforts and in an arm’s length transaction, is able to purchase as soon as reasonably possible for delivery after the {{euaprov|Reconciliation Deadline}} a number of {{euaprov|Allowances}} (such {{euaprov|Allowances}} also being of the same {{euaprov|Allowance Type}} equal to the {{euaprov|Shortfall}}; less | ||
::::::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus, in those circumstances in which the relevant termination of the parties’ obligations under | ::::::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant {{euaprov|Confirmation}} plus, in those circumstances in which the relevant termination of the parties’ obligations under “{{euaprov|Physical Settlement}}” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; plus | ||
::::::(III) the {{euaprov|EEP Amount}}; multiplied by: | ::::::(III) the {{euaprov|EEP Amount}}; multiplied by: | ||
:::::(b) the {{euaprov|Shortfall}}; plus | :::::(b) the {{euaprov|Shortfall}}; plus | ||
:::::(c) onterest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date {{euaprov|Receiving Party}} is or would be able to purchase Allowances in accordance with paragraph (II)(Y)(a)(1) above on an amount equal to the product of the number of {{euaprov|Undelivered Allowances}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (II)(Y)(a)(1) above over the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable; and | :::::(c) onterest at the {{euaprov|Default Rate}} for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date {{euaprov|Receiving Party}} is or would be able to purchase Allowances in accordance with paragraph (II)(Y)(a)(1) above on an amount equal to the product of the number of {{euaprov|Undelivered Allowances}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (II)(Y)(a)(1) above over the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable; and | ||
::(B) such reasonable costs and expenses which {{euaprov|Receiving Party}} incurs as a direct result of Delivering | ::(B) such reasonable costs and expenses which {{euaprov|Receiving Party}} incurs as a direct result of {{euaprov|Delivering Party}}’s failure to deliver the {{euaprov|Shortfall}} to the extent that those costs and expenses are not reflected in paragraphs (A)(I) or (A)(II) above; or | ||
:(3) if “{{euaprov|Failure to Deliver (Alternative Method)}}” is specified to be applicable in the Annex to this Part | :(3) if “{{euaprov|Failure to Deliver (Alternative Method)}}” is specified to be applicable in the Annex to this Part or the {{euaprov|Confirmation}} for an {{euaprov|EU Emissions Allowance Transaction}}, then, in respect of a failure to deliver a number of {{euaprov|Allowances}} (the number of {{euaprov|Allowances}} not so delivered being the “{{euaprov|RPRC Shortfall}}”), an amount equal to: | ||
::(A) | ::(A) | ||
:::(I) the price (per Allowance) {{euaprov|Receiving Party}}, acting in a commercially reasonable manner, does or would, in the determination of the Calculation Agent, pay in an arm’s length transaction concluded in accordance with prevailing market practice on the {{euaprov|Final Delivery Date}} to purchase a number of Allowances equivalent to the {{euaprov|RPRC Shortfall}} for delivery on the first {{euaprov|Delivery Business Day}} on which transactions concluded on the {{euaprov|Delivery Date}} would be settled in accordance with prevailing market practice; less | :::(I) the price (per {{euaprov|Allowance}}) {{euaprov|Receiving Party}}, acting in a [[commercially reasonable manner]], does or would, in the determination of the {{euaprov|Calculation Agent}}, pay in an arm’s length transaction concluded in accordance with prevailing market practice on the {{euaprov|Final Delivery Date}} to purchase a number of {{euaprov|Allowances}} equivalent to the {{euaprov|RPRC Shortfall}} for delivery on the first {{euaprov|Delivery Business Day}} on which transactions concluded on the {{euaprov|Delivery Date}} would be settled in accordance with prevailing market practice; less | ||
:::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, as set out in the Confirmation for such {{euaprov|EU Emissions Allowance Transaction}} plus, in those circumstances in which the relevant termination of the parties’ obligations under | :::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, as set out in the {{isdaprov|Confirmation}} for such {{euaprov|EU Emissions Allowance Transaction}} plus, in those circumstances in which the relevant termination of the parties’ obligations under “{{euaprov|Physical Settlement}}” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by: | ||
::(B) the {{euaprov|RPRC Shortfall}}; plus | ::(B) the {{euaprov|RPRC Shortfall}}; plus | ||
::(C) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the {{euaprov|Final Delivery Date}} on an amount equal to the product of the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable, and the {{euaprov|RPRC Shortfall}}. <br> | ::(C) interest at the {{euaprov|Default Rate}} for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the {{euaprov|Final Delivery Date}} on an amount equal to the product of the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable, and the {{euaprov|RPRC Shortfall}}. <br> |