Template:Emissions Settlement summ: Difference between revisions
Amwelladmin (talk | contribs) Created page with "{{euaprov|Settlement}}, {{efetaprov|Scheduling}}, {{ietaprov|Primary Obligation}} — the core provision that sets out who pays what, where and to whom, for {{{{{1}}}|Option Transaction}}s and {{{{{1}}}|Forward Transaction}}s. The JC is no great fan of definitions, but God only knows, in the ISDA one would have come in handy here. You know, a “'''{{euaprov|Purchase Amount}}'''” for {{euaprov|Forward Transaction}}s, or a “'''{{euaprov|Strike Amount}}'''” for {{e..." |
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{{euaprov|Settlement}}, {{efetaprov|Scheduling}}, {{ietaprov|Primary Obligation}} — the core provision that sets out who pays what, where and to whom, for {{{{{1}}}|Option Transaction}}s and {{{{{1}}}|Forward Transaction}}s. | {{euaprov|Settlement}} (ISDA), {{efetaprov|Scheduling}} (EFET), {{ietaprov|Primary Obligation}} (IETA) — the core provision that sets out who pays what, where and to whom, for {{{{{1}}}|Option Transaction}}s and {{{{{1}}}|Forward Transaction}}s. | ||
The JC is no great fan of definitions, but God only knows, in the ISDA one would have come in handy here. You know, a “'''{{euaprov|Purchase Amount}}'''” for {{euaprov|Forward Transaction}}s, or a “'''{{euaprov|Strike Amount}}'''” for {{euaprov|Option Transaction}}s (or a “'''{{euaprov|Transaction Amount}}'''”, for both) might have been nice, given they are the key concepts in {{euaprov|Option Transaction}}s and {{euaprov|Forward Transaction}}s. | The JC is no great fan of definitions, but God only knows, in the ISDA one would have come in handy here. You know, a “'''{{euaprov|Purchase Amount}}'''” for {{euaprov|Forward Transaction}}s, or a “'''{{euaprov|Strike Amount}}'''” for {{euaprov|Option Transaction}}s (or a “'''{{euaprov|Transaction Amount}}'''”, for both) might have been nice, given they are the key concepts in {{euaprov|Option Transaction}}s and {{euaprov|Forward Transaction}}s. | ||
Revision as of 13:56, 17 October 2023
Settlement (ISDA), Scheduling (EFET), Primary Obligation (IETA) — the core provision that sets out who pays what, where and to whom, for {{{{{1}}}|Option Transaction}}s and {{{{{1}}}|Forward Transaction}}s.
The JC is no great fan of definitions, but God only knows, in the ISDA one would have come in handy here. You know, a “Purchase Amount” for Forward Transactions, or a “Strike Amount” for Option Transactions (or a “Transaction Amount”, for both) might have been nice, given they are the key concepts in Option Transactions and Forward Transactions.
As for Allowances to be Delivered — okay, there is at least a term for the physical half of that, but it’s rubbish. What about “Delivery Amount”?
(To be fair to the Emissions ninjas at IETA, they do have this concept: “Contract Amount”).
Well, the JC has introduced these words into the nutshell summary to make life a bit easier to follow. Just remember they are not there in the real thing. Unless you put them in.
Cash Settlement: Trick question. There is no provision for cash-settlement in the emissions trading world. Will that stop counterparties asking you to specify a settlement method? Probably not. Does it matter? Also probably not. What if you want a cash settlement option? Not out of the ballpark — one’s eligibility for EMIR, and as such hedge exemptions, might depend on whether the forward is able to be cash-settled, in theory, or not. (There is no good reason for this: it springs from the paranoid brow of those toiler legal counsel who trying to parse the eligibility or Emissions derivatives under the refitted delegated regulations of MiFID 2 — our advice is just don’t go there — but you just never know.)