Template:Isda 3(d) summ: Difference between revisions
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The fabulous Section {{{{{1}}}|3(d)}} representation, giving one’s counterparty the right to [[close out]] should any so-designated [[representations]] turn out not to be true. This is sure to occupy an inordinate amount of your [[negotiation]] time — in that it occupies any time at all — because you are as likely to be hit in the face by a live | The fabulous Section {{{{{1}}}|3(d)}} representation, giving one’s counterparty the right to [[close out]] should any so-designated [[representations]] turn out not to be true. This is sure to occupy an inordinate amount of your [[negotiation]] time — in that it occupies any time at all — because you are as likely to be hit in the face by a live starfish in the Gobi Desert as you are to close out an {{isdama}} because your counterparty is late in preparing its annual accounts. [[Disclaimer|But that’s a personal view and you may not rely on it.]] | ||
The {{{{{1}}}|3(d)}} representation, in the {{isdaprov|documents for delivery}} table in the {{isdaprov|Schedule}}, therefore covers only the ''accuracy and completeness'' of {{{{{1}}}|Specified Information}} and not (for example) whether {{{{{1}}}|Specified Information}} is delivered ''at all''. For that, see Section {{{{{1}}}|4(a)}} - {{{{{1}}}|Furnish Specified Information}}. | The {{{{{1}}}|3(d)}} representation, in the {{isdaprov|documents for delivery}} table in the {{isdaprov|Schedule}}, therefore covers only the ''accuracy and completeness'' of {{{{{1}}}|Specified Information}} and not (for example) whether {{{{{1}}}|Specified Information}} is delivered ''at all''. For that, see Section {{{{{1}}}|4(a)}} - {{{{{1}}}|Furnish Specified Information}}. | ||
Revision as of 07:55, 20 September 2022
The fabulous Section {{{{{1}}}|3(d)}} representation, giving one’s counterparty the right to close out should any so-designated representations turn out not to be true. This is sure to occupy an inordinate amount of your negotiation time — in that it occupies any time at all — because you are as likely to be hit in the face by a live starfish in the Gobi Desert as you are to close out an ISDA Master Agreement because your counterparty is late in preparing its annual accounts. But that’s a personal view and you may not rely on it.
The {{{{{1}}}|3(d)}} representation, in the documents for delivery table in the Schedule, therefore covers only the accuracy and completeness of {{{{{1}}}|Specified Information}} and not (for example) whether {{{{{1}}}|Specified Information}} is delivered at all. For that, see Section {{{{{1}}}|4(a)}} - {{{{{1}}}|Furnish Specified Information}}.
What’s that Section {{{{{1}}}|3(d)}} representation malarkey?
If one is required to “furnish” {{{{{1}}}|Specified Information}} under Section {{{{{1}}}|4}}, two things can go wrong:
- No show: one can fail to provide it, at all, in which case there is a {{{{{1}}}|Breach of Agreement}}, but be warned: the period before one can enforce such a failure, judged by the yardstick of modern financial contracts, is long enough for a whole kingdom of dinosaurs to evolve and be wiped out; or
- It’s cobblers: one can provide the {{{{{1}}}|Specified Information}}, on time, but it can be a total pile of horse ordure. Now, here is a trick for young players: if your {{{{{1}}}|Specified Information}} is, or turns out to be, false, you have no remedy unless you have designated that it is “subject to the Section {{{{{1}}}|3(d)}} representation”. That is the one that promises it is accurate and not misleading.
Now you might ask what good an item of {{{{{1}}}|Specified Information}} can possibly be, if Section {{{{{1}}}|3(d)}} didn’t apply and it could be just made up on the spot without fear of retribution — as a youngster, the JC certainly asked that question, and has repeated it over many years, and is yet to hear a good answer — but all we can presume is that in its tireless quest to cater for the unguessable predilections of the negotiating community, ISDA’s crack drafting squad™ left this preposterous option open just in case. It wouldn’t be the first time.