Template:Nutshell Commodity Definitions Change in Law: Difference between revisions
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“'''{{commoddefprov|Change in Law}}'''” means that due to any change in any Rule, or any Regulator promulgating or changing its interpretation of any Rule, after the Trade Date, the {{commoddefprov|Hedging Party}} determines [[in good faith]] that it is not permitted by such Rule to hold, acquire or dispose of its {{commoddefprov|Hedge Positions}}, including where such change the {{commoddefprov|Hedging Party}}’s {{commoddefprov|Hedge Positions}} would exceed of any permitted position limits on any exchange or trading facility (it being within the {{commoddefprov|Hedging Party}}’s sole discretion to determine which of its positions count towards any such limit). | “'''{{commoddefprov|Change in Law}}'''” means that due to any change in any Rule, or any Regulator promulgating or changing its interpretation of any Rule, after the Trade Date, the {{commoddefprov|Hedging Party}} determines [[in good faith]] that it is not permitted by such Rule to hold, acquire or dispose of its {{commoddefprov|Hedge Positions}}, including where such change the {{commoddefprov|Hedging Party}}’s {{commoddefprov|Hedge Positions}} would exceed of any permitted position limits on any exchange or trading facility (it being within the {{commoddefprov|Hedging Party}}’s sole discretion to determine which of its positions count towards any such limit). | ||
If “'''{{commoddefprov|Change in Law}}'''” applies and a {{commoddefprov|Change in Law}} occurs, the {{commoddefprov|Hedging Party}} may terminate the {{commoddefprov|Transaction}} upon at least two {{commoddefprov|Business Day}}s’ notice to the other party specifying the date of such termination (or such lesser notice as may be required to comply with the {{commoddefprov|Change in Law}}), and the {{commoddefprov|Transaction}} will terminate and the {{commoddefprov|Hedging Party}} will determine the | If “'''{{commoddefprov|Change in Law}}'''” applies and a {{commoddefprov|Change in Law}} occurs, the {{commoddefprov|Hedging Party}} may terminate the {{commoddefprov|Transaction}} upon at least two {{commoddefprov|Business Day}}s’ notice to the other party specifying the date of such termination (or such lesser notice as may be required to comply with the {{commoddefprov|Change in Law}}), and the {{commoddefprov|Transaction}} will terminate and the {{commoddefprov|Hedging Party}} will determine the Cancellation Amount payable by one party to the other in good faith using commercially reasonable procedures as of the date the {{commoddefprov|Transaction}} was terminated (or such other dates as would be [[commercially reasonable]]), which may include {{commoddefprov|Hedging Party}}’s pricing and valuation models for similar transactions with third parties which may differ depending on the type, complexity or size of the {{commoddefprov|Transaction}}. <br> | ||
In determining a Cancellation Amount, the {{commoddefprov|Hedging Party}} may consider: | |||
::(i) '''[[Dealer]] quotations''': [[dealer]] quotations for replacement transactions | |||
::(ii) '''Market data''': market data; and | |||
::(iii) '''Internal valuations''': similar material from internal sources and {{commoddefprov|Affiliates}} where they are regularly used by the {{commoddefprov|Hedging Party}} in its business for similar valuations.<br> | |||
In this section: | |||
“'''Rule'''” means any applicable law, regulation or rule binding on the hedging Party, including the rules of any Exchange. | “'''Rule'''” means any applicable law, regulation or rule binding on the hedging Party, including the rules of any Exchange. | ||
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“'''Hedge Positions'''” means any positions in commodities, exchange-traded commodity derivatives or over-the-counter commodity derivatives entered into in order to hedge the {{commoddefprov|Hedging Party}}’s obligations under this {{commoddefprov|Transaction}}. | “'''Hedge Positions'''” means any positions in commodities, exchange-traded commodity derivatives or over-the-counter commodity derivatives entered into in order to hedge the {{commoddefprov|Hedging Party}}’s obligations under this {{commoddefprov|Transaction}}. | ||
“''' | “'''Cancellation Amount'''” means the gains or losses the {{commoddefprov|Hedging Party}} would incur under prevailing circumstances in replacing (i) the material terms of the {{commoddefprov|Transaction}}, including payments and deliveries that would, but for the {{commoddefprov|Change in Law}}, have been required after termination and (ii) the parties’ option rights under the {{commoddefprov|Transaction}}. <br> |