Template:Isda Automatic Early Termination comp: Difference between revisions

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{{isdacomparisons|83262|40195|40196}}
{{isdacomparisons|83262|40195|40196}}
{{{{{1}}}|Automatic Early Termination}} first appeared as a ''named'' term in the {{1992ma}}. It did feature, uncredited, in the {{1987ma}}, though in this larval stage it was a blunt instrument indeed: it was mandatory and applied against every party in the case of ''any'' Bankruptcy event, regardless of the risk that party’s insolvency regime posed to the ISDA’s carefully machined close-out and netting mechanics.
{{drop|A|utomatic Early Termination}} first appeared as a ''named'' term in the {{1992ma}}. It did feature, uncredited, in the {{1987ma}}, though in this larval stage it was a blunt instrument indeed.  
 
The {{1987ma}} unquestionably overdid it: its generally ham-fisted approach to netting is one of  many reasons most people have for a long time given it a wide berth.


By 1992, the [[’squad]] had made some key adjustments:
By 1992, the [[’squad]] had made some key adjustments:
{{gb|They made it an option you could elect in the Schedule, and typically only would elect against a counterparty in one of the few jurisdictions where the [[netting opinion]] required it.<li>
{{gb|They made it an option you could elect in the Schedule, and typically only would elect against counterparties in one of the few jurisdictions where the local [[netting opinion]] required it.<li>
They narrowed down its scope, by excluding limbs (2) ([[cashflow insolvency]]) and (7) (contractual sequestration) of the {{{{{1}}}|Bankruptcy}} definition from its ambit.<li>
They narrowed down its scope, by excluding from its ambit limbs (2) ([[cashflow insolvency]]) and (7) (contractual sequestration) of the {{{{{1}}}|Bankruptcy}} definition.<li>
They also officially labelled it “{{{{{1}}}|Automatic Early Termination}}”.}}  
They also officially labelled it “{{{{{1}}}|Automatic Early Termination}}”.}}  


Thereafter they did not change the language of {{{{{1}}}|6(a)}} between the {{1992ma}} and the {{2002ma}}, though there ''was'' an adjustment to {{{{{1}}}|bankruptcy petition}} event (Section {{{{{1}}}|5(a)(vii)(4)}} of the {{{{{1}}}|Bankruptcy}} definition), to narrow down the applicability of the [[grace period]].
Thereafter they did not change the language of {{{{{1}}}|6(a)}} between the {{1992ma}} and the {{2002ma}}, though there ''was'' an adjustment to the definition of what counted as a “{{{{{1}}}|bankruptcy petition}}” under Section {{{{{1}}}|5(a)(vii)(4)}} of the {{{{{1}}}|Bankruptcy}} definition, to narrow down the applicability of the problematic [[grace period]]. Problematic for reasons we discuss at length in the premium section (see {{pjchotlink|formal bankruptcy petitions and grace periods}}).

Revision as of 09:22, 12 October 2024

Redlines


Discussion

Automatic Early Termination first appeared as a named term in the 1992 ISDA. It did feature, uncredited, in the 1987 ISDA, though in this larval stage it was a blunt instrument indeed.

By 1992, the ’squad had made some key adjustments:

  • They made it an option you could elect in the Schedule, and typically only would elect against counterparties in one of the few jurisdictions where the local netting opinion required it.
  • They narrowed down its scope, by excluding from its ambit limbs (2) (cashflow insolvency) and (7) (contractual sequestration) of the {{{{{1}}}|Bankruptcy}} definition.
  • They also officially labelled it “{{{{{1}}}|Automatic Early Termination}}”.

Thereafter they did not change the language of {{{{{1}}}|6(a)}} between the 1992 ISDA and the 2002 ISDA, though there was an adjustment to the definition of what counted as a “{{{{{1}}}|bankruptcy petition}}” under Section {{{{{1}}}|5(a)(vii)(4)}} of the {{{{{1}}}|Bankruptcy}} definition, to narrow down the applicability of the problematic grace period. Problematic for reasons we discuss at length in the premium section (see formal bankruptcy petitions and grace periods).