Template:Failure to pay procedure: Difference between revisions
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There is a bit of a [[chicken licken]]-and-egg situation here as you can’t really work out their [[mark-to-market]] values for that date at any time ''before'' that date, unless you are able to see into the future or something. Anyway, that’s a conundrum for your [[Trader|trading]] people (and in-house [[Metaphysics|metaphysicians]]) to deal with and it need not trouble we [[Legal Eagles|eagles of the law]]. For our purposes, the trading and risk people need to come up with {{isdaprov|Close-out Amount}}s for all outstanding {{{{{1}}}|Transaction}}s. Once they have done that you are ready for your Section {{{{{1}}}|6(e)}} notice. | There is a bit of a [[chicken licken]]-and-egg situation here as you can’t really work out their [[mark-to-market]] values for that date at any time ''before'' that date, unless you are able to see into the future or something. Anyway, that’s a conundrum for your [[Trader|trading]] people (and in-house [[Metaphysics|metaphysicians]]) to deal with and it need not trouble we [[Legal Eagles|eagles of the law]]. For our purposes, the trading and risk people need to come up with {{isdaprov|Close-out Amount}}s for all outstanding {{{{{1}}}|Transaction}}s. Once they have done that you are ready for your Section {{{{{1}}}|6(e)}} notice. | ||
====6. | ====6. Calculate and notify==== | ||
Your in-house metaphysicians having calculated your {{isdaprov|Close-out Amount}}s,<ref name="close out amounts"/> | The {{{{{1}}}|Early Termination Date}} is the date on which the {{{{{1}}}|Transaction}}s terminate; it is the date ''by reference to which'' you calculate their termination values, ''not'' the date by you have to have ''valued'', much less ''settled'' outstanding amounts due as a result of their termination — that would be a logical impossibility for those not imbued with the power of foresight. Here we move onto Section {{{{{1}}}|6(d)}}, under which, as soon as is practicable ''after'' the {{{{{1}}}|Early Termination Date}}, your boffins work out all the termination values for each {{{{{1}}}|Transaction}}, tot them up to arrive at the Section {{{{{1}}}|6(e)}} amount, and send a [[6(d) - ISDA Provision|statement]] to the defaulting party, specifying the {{{{{1}}}|Early Termination Amount}} payable, the bank details, and reasonable details of calculations. | ||
====7. Pay your {{{{{1}}}|Early Termination Amount}}==== | |||
Your in-house metaphysicians having calculated your {{isdaprov|Close-out Amount}}s,<ref name="close out amounts"/> and assembled all the values into an {{{{{1}}}|Early Termination Amount}}<ref>Or, in the {{1992ma}}’s estimable prose, “the amount, if any, payable in respect of an {{isdaprov|Early Termination Date}} and determined pursuant to this Section”.</ref> the party who owes it must pay the {{{{{1}}}|Early Termination Amount}}. With {{icds}} yen for infinite fiddlarity, this will depend on whether the Early Termination Date follows an Event of Default or an Termination Event. If the former, the {{{{{1}}}|Early Termination Amount}} is payable at once, as soon as the {{{{{1}}}|6(d)}} statement is deemed delivered; if a {{{{{1}}}|Termination Event}}, only two Local Business Days {{ikr}} after the {{{{{1}}}|6(d)}} statement is delivered (or, where there are two Affected Parties and both are delivering each other 6(d) statements {{ikr}} after both have done so). on that day you selected way back in step 4, when you designated an {{{{{1}}}|Early Termination Date}}. | |||