Template:Failure to pay procedure: Difference between revisions
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The standard [[grace period]]s are set out in Section {{{{{1}}}|5(a)(i)}}. ''Be careful'': under a {{2002ma}} the standard is '''''one''''' {{{{{1}}}|Local Business Day}}. Under the {{1992ma}} the standard is '''''three''''' {{isda92prov|Local Business Day}}s. ''But check the {{{{{1}}}|Schedule}}'' because in either case this is the sort of thing that counterparties adjust: {{2002ma}}s are often adjusted to conform to the {{1992ma}} standard of three {{{{{1}}}|LBD}}s, for example. | The standard [[grace period]]s are set out in Section {{{{{1}}}|5(a)(i)}}. ''Be careful'': under a {{2002ma}} the standard is '''''one''''' {{{{{1}}}|Local Business Day}}. Under the {{1992ma}} the standard is '''''three''''' {{isda92prov|Local Business Day}}s. ''But check the {{{{{1}}}|Schedule}}'' because in either case this is the sort of thing that counterparties adjust: {{2002ma}}s are often adjusted to conform to the {{1992ma}} standard of three {{{{{1}}}|LBD}}s, for example. | ||
So: once you have a clear, notified {{{{{1}}}|Failure to Pay or Deliver}}, you have to wait ''at least'' one and possibly three or more {{{{{1}}}|Local Business Day}}s before doing anything about it. Therefore, you are on tenterhooks until the [[close of business]] '''T+2''' {{{{{1}}}|LBD}}s (standard {{2002ma}}), or '''T+4''' {{isda92prov|LBD}}s (standard {{1992ma}}). | So: once you have a clear, notified {{{{{1}}}|Failure to Pay or Deliver}}, you have to wait ''at least'' one and possibly three or more {{{{{1}}}|Local Business Day}}s before doing anything about it. Therefore, you are on tenterhooks until the [[close of business]] '''T+2''' {{{{{1}}}|LBD}}s (standard {{2002ma}}), or '''T+4''' {{isda92prov|LBD}}s (standard {{1992ma}}). | ||
''Trick for the young players'': check that the conditions precedent to payment under Section {{{{{1}}}|2}} remain fulfilled. For example, has the defaulting party got any grounds to suspend payment under Section {{{{{1}}}|2(a)(iii)}}? It might, for example, if you have slipped into {{{{{1}}}|Bankruptcy}} or {{{{{1}}}|Cross Default}} in the meantime. | |||
Let us imagine for a moment you have indeed waited the necessary time. | Let us imagine for a moment you have indeed waited the necessary time. | ||