Specified Entity - ISDA Provision: Difference between revisions
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It is relevant to the definition of {{isdaprov|Cross Default}} and {{isdaprov|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified. | It is relevant to the definition of {{isdaprov|Cross Default}} and {{isdaprov|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified. | ||
===Tricks for | ===Tricks for young players: nominating {{isdaprov|Specified Entities}} for yourself has its upsides=== | ||
{{isdaprov|Specified Entity}} widens the scope of those provisions also to include defaults by {{isdaprov|Specified Entities}} under contracts with ''your'' {{isdaprov|Specified Entities}} - so there *is* some benefit to naming ''your'' affiliates, friends and relations as {{isdaprov|Specified Entities}}. But given how unlikely you are to be actually monitoring how a counterparty performs with an affiliate, it's more of a false comfort than a real one. | {{isdaprov|Specified Entity}} widens the scope of those provisions also to include defaults by {{isdaprov|Specified Entities}} under contracts with ''your'' {{isdaprov|Specified Entities}} - so there *is* some benefit to naming ''your'' affiliates, friends and relations as {{isdaprov|Specified Entities}}. But given how unlikely you are to be actually monitoring how a counterparty performs with an affiliate, it's more of a false comfort than a real one. | ||
Revision as of 13:53, 15 March 2016
In gory detail
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1992 ISDA |
2002 ISDA |
Commentary
Note the reference in relation to (a) Section 5(a) Termination Events (like DUST for example), and (b) the "Absence of Litigation" representation in Section 3(c) of the 2002 ISDA.
A Specified Enity is any affiliate (or, in theory at any rate, even a non-affiliate) of a counterparty to an ISDA Master Agreement which is designated in the relevant Schedule.
It is relevant to the definition of Cross Default and Default under Specified Transaction in that it widens the effect of those provisions to include defaults by the parties specified.
Tricks for young players: nominating Specified Entities for yourself has its upsides
Specified Entity widens the scope of those provisions also to include defaults by Specified Entities under contracts with your Specified Entities - so there *is* some benefit to naming your affiliates, friends and relations as Specified Entities. But given how unlikely you are to be actually monitoring how a counterparty performs with an affiliate, it's more of a false comfort than a real one.