Template:Eta vs close-out amount: Difference between revisions
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====On the difference between an “Early Termination Amount” and a “Close-out Amount”==== | =====On the difference between an “Early Termination Amount” and a “Close-out Amount”===== | ||
The {{1992ma}} features ''neither'' an {{isdaprov|Early Termination Amount}} ''or'' a {{isdaprov|Close-out Amount}}, which many would see as a regrettable oversight. The {{2002ma}} has both, which looks like rather an indulgence | The {{1992ma}} features ''neither'' an {{isdaprov|Early Termination Amount}} ''or'' a {{isdaprov|Close-out Amount}}, which many would see as a regrettable oversight. The {{2002ma}} has both, which looks like rather an indulgence until you realise that they do different things.<ref>This is not to say it isn’t hugely over-engineered, all the same: regular readers will know that the [[JC]] would ''never'' not say that about the output of {{icds}}.</ref> | ||
A {{isdaprov|Close-out Amount}} is the termination value for a single {{isdaprov|Transaction}}, or a related group of {{isdaprov|Transaction}}s that a {{isdaprov|Non-Defaulting Party}} or {{isdaprov|Non-Affected Party}} calculates ''while'' closing out an {{2002ma}}, but it is ''not'' the final, overall sum due under the {{isdama}} itself. Each of the determined {{isdaprov|Close-out Amount}}s summed with the various {{isdaprov|Unpaid Amount}}s to arrive at the {{isdaprov|Early Termination Amount}}, which is the total net sum due under the {{isdama}} | A {{isdaprov|Close-out Amount}} is the termination value for a single {{isdaprov|Transaction}}, or a related group of {{isdaprov|Transaction}}s that a {{isdaprov|Non-Defaulting Party}} or {{isdaprov|Non-Affected Party}} calculates ''while'' closing out an {{2002ma}}, but it is ''not'' the final, overall sum due under the {{isdama}} itself. Each of the determined {{isdaprov|Close-out Amount}}s summed with the various {{isdaprov|Unpaid Amount}}s to arrive at the {{isdaprov|Early Termination Amount}}, which is the total net sum due under the {{isdama}} after the close-out process. (See Section {{isdaprov|6(e)(i)}} for more on that). | ||
Revision as of 17:15, 1 January 2024
On the difference between an “Early Termination Amount” and a “Close-out Amount”
The 1992 ISDA features neither an Early Termination Amount or a Close-out Amount, which many would see as a regrettable oversight. The 2002 ISDA has both, which looks like rather an indulgence until you realise that they do different things.[1]
A Close-out Amount is the termination value for a single Transaction, or a related group of Transactions that a Non-Defaulting Party or Non-Affected Party calculates while closing out an 2002 ISDA, but it is not the final, overall sum due under the ISDA Master Agreement itself. Each of the determined Close-out Amounts summed with the various Unpaid Amounts to arrive at the Early Termination Amount, which is the total net sum due under the ISDA Master Agreement after the close-out process. (See Section 6(e)(i) for more on that).
- ↑ This is not to say it isn’t hugely over-engineered, all the same: regular readers will know that the JC would never not say that about the output of ISDA’s crack drafting squad™.