Template:M comp disc EUA Annex all a dream: Difference between revisions
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Revision as of 15:23, 22 May 2023
In a Nutshell™ what is going on here is:
- When you thought you were going to settle, you can’t — where it isn’t your fault (that’s a Failure to Deliver) and it isn’t the European Union’s fault either (that’s a Suspension Event)
- The parties’ respective settlement obligations are suspended until resolution, and (unless things don’t resolve for an unfeasibly long time) then performed within two business days of the settlement Disruption Event lifting;
- If they don’t lift by the earliest of (i) 9 Delivery Business Days following scheduled settlement or (ii) the next Reconciliation Deadline by which the EUAs have to be surrendered or (iii) 3 Delivery Business Days before the next End of Phase Reconciliation Deadline, then it is deemed to be an Illegality.
- If there is an Early Termination Date[1] then if “Payment on Termination for Settlement Disruption” applies, you determine the Early Termination Amount assuming the suspended obligations resume on the Early Termination Date, and if it doesn’t, that’s all she wrote.
But note: no extra Cost of Carry Amount factored in here, as there is for a Suspension Event. Why? Cherchez moi. If you find out, let me know.
You will notice similarities between the way a Suspension Event and a Settlement Disruption Event. One can, and we do, bellyache about the way ISDA’s crack drafting squad™ goes about the task of rendering its fantastical ideas in the language of Shakespeare and Milton, but you can’t really fault them for consistency.
Here, in counterpoint to a normal Settlement Disruption Event if there is delayed performance the payment obligation is adjusted to include a Cost of Carry Amount.
Section (d)(iv), about Abandonment of Scheme, similarly, weirdly, plumps for the just a dream scenario. You would think a Forward seller, whether outright or of an option, who thought she had got those confounded Allowances off her desk, might be dismayed to find them right back on there at just the point where they became utterly valueless.
- ↑ Which there should be... but who knows, maybe a man from mars will come down and start eating up bars in the mean time.