Template:Calculation agent versus determination agent: Difference between revisions
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===The difference between the {{eqderivprov|Calculation Agent}} and the {{eqderivprov|Determining Party}}=== | ===The difference between the {{eqderivprov|Calculation Agent}} and the {{eqderivprov|Determining Party}}=== | ||
The {{eqderiv}} recognise that while most calculations could be performed by whoever is appointed {{eqderivprov|Calculation Agent}}, determination of a {{eqderivprov|Cancellation Amount}} is inextricably related to the [[hedge]] | '''Why''': The {{eqderiv}} recognise that while most calculations could be performed by whoever is appointed {{eqderivprov|Calculation Agent}}, determination of a {{eqderivprov|Cancellation Amount}} is inextricably related to the [[hedge]] and —- especially where there is a [[Market Disruption Event - Equity Derivatives Provision|disrupted market]] – this is best to be calculated by the one whose problem it is to unwinding that hedge: namely, the {{eqderivprov|Hedging Party}}. In theory (though almost never in practice<ref>If ''{{eqderivprov|Calculation Agent}} == [[Dealer]]'', and ''[[Dealer]] == {{eqderivprov|Hedging Party}}'', and ''{{eqderivprov|Hedging Party}} == {{eqderivprov|Determining Party}}'', then ''{{eqderivprov|Calculation Agent}} == {{eqderivprov|Determining Party}}''.</ref>) the {{eqderivprov|Hedging Party}} might not be the {{eqderivprov|Calculation Agent}}. | ||
</ref>) the {{eqderivprov|Hedging Party}} might not be the {{eqderivprov|Calculation Agent}}. | |||
The {{eqderivprov|Determining Party}} only ever has to determine a {{eqderivprov|Cancellation Amount}}, {{eqderivprov|Cancellation and Payment}} or {{eqderivprov|Partial Cancellation and Payment}} under {{eqderivprov|12.8}}, and that will only happen in only when a Transaction terminates following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}. | '''When''': The {{eqderivprov|Determining Party}} only ever has to determine a {{eqderivprov|Cancellation Amount}}, {{eqderivprov|Cancellation and Payment}} or {{eqderivprov|Partial Cancellation and Payment}} under {{eqderivprov|12.8}}, and that will only happen in only when a Transaction terminates following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}. | ||
Nevertheless, this is all the opportunity my brethren in the [[Mediocre lawyer|legal profession]]need to confect, and spray-hose all over your confirmation, language like ''“determination or calculation, [[as the case may be]], made (respectively) by the Calculation Agent or Determining Party, [[as the case may be]]”''. | '''Enter the lawyers''': Nevertheless, this is all the opportunity my brethren in the [[Mediocre lawyer|legal profession]]need to confect, and spray-hose all over your confirmation, language like ''“determination or calculation, [[as the case may be]], made (respectively) by the Calculation Agent or Determining Party, [[as the case may be]]”''. | ||
Revision as of 11:41, 13 April 2017
The difference between the Calculation Agent and the Determining Party
Why: The Equity Derivatives recognise that while most calculations could be performed by whoever is appointed Calculation Agent, determination of a Cancellation Amount is inextricably related to the hedge and —- especially where there is a disrupted market – this is best to be calculated by the one whose problem it is to unwinding that hedge: namely, the Hedging Party. In theory (though almost never in practice[1]) the Hedging Party might not be the Calculation Agent.
When: The Determining Party only ever has to determine a Cancellation Amount, Cancellation and Payment or Partial Cancellation and Payment under 12.8, and that will only happen in only when a Transaction terminates following an Extraordinary Event or an Additional Disruption Event.
Enter the lawyers: Nevertheless, this is all the opportunity my brethren in the legal professionneed to confect, and spray-hose all over your confirmation, language like “determination or calculation, as the case may be, made (respectively) by the Calculation Agent or Determining Party, as the case may be”.
- ↑ If Calculation Agent == Dealer, and Dealer == Hedging Party, and Hedging Party == Determining Party, then Calculation Agent == Determining Party.