Template:Nutshell 2018 CSD 3(c)(iii): Difference between revisions

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{{imcsdprov|3(c)(iii)}} '''{{imcsdprov|Margin Approach}}'''.  The parties will agree in Paragraph {{imcsdprov|13}}, one of the following “'''{{imcsdprov|Margin Approach}}es'''” to govern the relationship between “'''{{imcsdprov|Margin Amount (IM)}}'''” and “'''{{imcsdprov|Margin Amount (IA)}}'''”.   
{{imcsdprov|3(c)(iii)}} '''{{imcsdprov|Margin Approach}}'''.  The parties will agree in Paragraph {{imcsdprov|13}}, one of the following “'''{{imcsdprov|Margin Approach}}es'''” to govern the relationship between “'''{{imcsdprov|Margin Amount (IM)}}'''” and “'''{{imcsdprov|Margin Amount (IA)}}'''”.   
:(A) “'''{{imcsdprov|Distinct Margin Flow (IM) Approach}}'''”:
{{Nutshell 2018 CSD 3(c)(iii)(A)}}
::(1) “'''{{imcsdprov|Credit Support Amount (IM)}}'''” means, with respect to a party as the {{imcsdprov|Chargor}}, for any {{imcsdprov|Calculation Date (IM)}}, (i) the {{imcsdprov|Margin Amount (IM)}} applicable to the {{imcsdprov|Chargor}}, if any, minus (ii) the {{imcsdprov|Chargor}}’s {{imcsdprov|Threshold (IM)}}; provided, however, that the {{imcsdprov|Credit Support Amount (IM)}} will be deemed to be zero whenever the calculation of the {{imcsdprov|Credit Support Amount (IM)}} yields a number less than zero.
{{Nutshell 2018 CSD 3(c)(iii)(B)}}
::(2) No Amendment to {{imcsdprov|Obligations}} in respect of {{imcsdprov|Margin Amount (IA)}}. The posting obligation of a {{imcsdprov|Chargor}} in respect of any amount that constitutes a {{imcsdprov|Margin Amount (IA)}} under any {{imcsdprov|Other CSA}} shall not be affected or amended in any way by the provisions of this Deed.
{{Nutshell 2018 CSD 3(c)(iii)(C)}}
:(B) If the “'''{{imcsdprov|Allocated Margin Flow (IM/IA) Approach}}'''” is specified as applicable in Paragraph {{imcsdprov|13}}, the following provisions will apply:
::(1) “'''{{imcsdprov|Credit Support Amount (IM)}}'''” means, with respect to a party as the {{imcsdprov|Chargor}}, for any {{imcsdprov|Calculation Date (IM)}}, (i) the {{imcsdprov|Margin Amount (IM)}} applicable to the {{imcsdprov|Chargor}}, if any, minus (ii) the {{imcsdprov|Chargor}}’s {{imcsdprov|Threshold (IM)}}; provided, however, that the {{imcsdprov|Credit Support Amount (IM)}} will be deemed to be zero whenever the calculation of the {{imcsdprov|Credit Support Amount (IM)}} yields a number less than zero.
::(2) Amendment to {{imcsdprov|Obligations}} in respect of {{imcsdprov|Margin Amount (IA)}}. The posting obligation of a {{imcsdprov|Chargor}} in respect of any amount that constitutes a {{imcsdprov|Margin Amount (IA)}} under any {{imcsdprov|Other CSA}} shall be reduced on an aggregate basis by the amount of the {{imcsdprov|Chargor}}’s {{imcsdprov|Credit Support Amount (IM)}}; provided, however, that if, after such reduction, any such {{imcsdprov|Margin Amount (IA)}} would be a negative amount, such {{imcsdprov|Margin Amount (IA)}} will be deemed to be zero. <br>
:(C) If the “'''{{imcsdprov|Greater of Margin Flow (IM/IA) Approach}}'''” is specified as applicable in Paragraph {{imcsdprov|13}}, the following provisions will apply:
:(C) If the “'''{{imcsdprov|Greater of Margin Flow (IM/IA) Approach}}'''” is specified as applicable in Paragraph {{imcsdprov|13}}, the following provisions will apply:
::(1) “'''{{imcsdprov|Credit Support Amount (IM)}}'''” means, with respect to a party as the {{imcsdprov|Chargor}}, for any {{imcsdprov|Calculation Date (IM)}}, the greater of (i)(A) the {{imcsdprov|Margin Amount (IM)}} applicable to the {{imcsdprov|Chargor}}, if any, minus (B) the {{imcsdprov|Chargor}}’s {{imcsdprov|Threshold (IM)}} and (ii) the {{imcsdprov|Margin Amount (IA)}}; provided, however, that the {{imcsdprov|Credit Support Amount (IM)}} will be deemed to be zero whenever the calculation of the {{imcsdprov|Credit Support Amount (IM)}} yields a number less than zero.
::(1) “'''{{imcsdprov|Credit Support Amount (IM)}}'''” means, with respect to a party as the {{imcsdprov|Chargor}}, for any {{imcsdprov|Calculation Date (IM)}}, the greater of (i)(A) the {{imcsdprov|Margin Amount (IM)}} applicable to the {{imcsdprov|Chargor}}, if any, minus (B) the {{imcsdprov|Chargor}}’s {{imcsdprov|Threshold (IM)}} and (ii) the {{imcsdprov|Margin Amount (IA)}}; provided, however, that the {{imcsdprov|Credit Support Amount (IM)}} will be deemed to be zero whenever the calculation of the {{imcsdprov|Credit Support Amount (IM)}} yields a number less than zero.
::(2) Amendment to {{imcsdprov|Obligations}} in respect of {{imcsdprov|Margin Amount (IA)}}. The posting obligation of a {{imcsdprov|Chargor}} in respect of any amount that constitutes a {{imcsdprov|Margin Amount (IA)}} under any {{imcsdprov|Other CSA}}, other than such obligations of a {{imcsdprov|Chargor}} under this Deed, shall be reduced to zero. <br>
::(2) Amendment to {{imcsdprov|Obligations}} in respect of {{imcsdprov|Margin Amount (IA)}}. The posting obligation of a {{imcsdprov|Chargor}} in respect of any amount that constitutes a {{imcsdprov|Margin Amount (IA)}} under any {{imcsdprov|Other CSA}}, other than such obligations of a {{imcsdprov|Chargor}} under this Deed, shall be reduced to zero. <br>

Revision as of 09:16, 19 April 2021

3(c)(iii) Margin Approach. The parties will agree in Paragraph 13, one of the following “Margin Approaches” to govern the relationship between “Margin Amount (IM)” and “Margin Amount (IA)”.

(A) If “Distinct Margin Flow (IM) Approach” applies: Max [Margin Amount (IM) - Threshold (IM), 0], and the Chargor’s Margin Amount (IA) posting obligation under any Other CSA will not be affected in any way.
(B) If “Allocated Margin Flow (IM/IA) Approach” applies: Max [Margin Amount (IM) - Threshold (IM), 0] and its posting obligation for Margin Amount (IA) under any Other CSA will be reduced by that Credit Support Amount (IM) (subject to a minimum of zero).
(C) If “Greater of Margin Flow (IM/IA) Approach” applies: Max [Max [Margin Amount (IM) -Threshold (IM), Margin Amount (IA)], 0], and its posting obligation for Margin Amount (IA) under any Other CSA will be reduced to zero.
(C) If the “Greater of Margin Flow (IM/IA) Approach” is specified as applicable in Paragraph 13, the following provisions will apply:
(1) “Credit Support Amount (IM)” means, with respect to a party as the Chargor, for any Calculation Date (IM), the greater of (i)(A) the Margin Amount (IM) applicable to the Chargor, if any, minus (B) the Chargor’s Threshold (IM) and (ii) the Margin Amount (IA); provided, however, that the Credit Support Amount (IM) will be deemed to be zero whenever the calculation of the Credit Support Amount (IM) yields a number less than zero.
(2) Amendment to Obligations in respect of Margin Amount (IA). The posting obligation of a Chargor in respect of any amount that constitutes a Margin Amount (IA) under any Other CSA, other than such obligations of a Chargor under this Deed, shall be reduced to zero.
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