Template:M sa 2002 ISDA 2(a)(iii): Difference between revisions

Latest revision as of 11:21, 30 December 2023

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-Are there [[flawed asset]] clauses in other master agreements?
+{{isda 2(a)(iii) sa|isdaprov}}
-*'''{{gmsla}}''': As far as I can see there is no direct {{isdaprov|2(a)(iii)}} equivalent in the GMSLA, but Section {{gmslaprov|8.6}}, which allows you to suspend payment if you suspect your counterparty’s creditworthiness, is the closest, but it isn't a flawed asset clause. Nor would you expect one. It makes little sense in a master agreement for transactions that generally have zero or short tenors, and are inherently margined daily as a matter of course – i.e., there are no “uncollateralised, large, [[out-of-the-money]] exposures” an innocent stock lender would want to protect with such a [[flawed asset]] provision.
-*'''{{gmra}}''': Now here’s the funny thing. Even though the {{tag|GMRA}} is comparable to the {{tag|GMSLA}} in most meaningful ways, it '''does''' have a flawed asset provision. I don’t understand it, but that is true about much of the world of international finance.