Accuracy of Specified Information - ISDA Provision: Difference between revisions

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{{isdaanat|3(d)}}The fabulous Section {{isdaprov|3(d)}} representation, giving one’s counterparty the right to close out should any so-designated representations turn out not to be true. This is sure to occupy an inordinate amount of your [[negotiation]] time — in that it occupies any time at all — because you are as likely to be hit in the face by a live flying starfish in the driest part of the Gobi Desert as you are to close out an ISDA because your counterparty is late preparing its annual accounts. [[Disclaimer|But that’s a personal view and you may not rely on it.]]
{{manual|MI|2002|3(d)|Sections(d)|long}}
 
{{Section 3(d) capsule}}
 
Note that the {{isdaprov|3(d)}} representation, in the ISDA {{isdaprov|documents for delivery}} table in the {{isdaprov|Schedule}}, therefore covers only the accuracy, completeness of {{isdaprov|Specified Information}} and not (for example) whether it is delivered at all or not. For that, see Section {{isdaprov|4(a)}} - {{isdaprov|Furnish Specified Information}}.
{{commonnegpoints}}
Opposing negotiators may try to crowbar in something like this, to satisfy their yen to make a difference and please their clients with their acumen and commercial fortitude:
:''“or, in the case of financial information, a fair representation of the financial condition of the relevant party, provided that the other party may rely on any such information when determining whether an Additional Termination Event has occurred.”''
 
This is predicated on the following reasoning: “In publishing the audit, the auditor itself is not making any greater representation than that the statements are a fair representation of the financial conditions. I’m no accountant. I didn’t even write the stupid audit. How am I supposed to know? Why should I give any a stronger representation than the expert?”
 
Fair questions, but they misapprehend what is being asked.The riposte is this:
 
The {{isdaprov|Part 3}} information you must supply is “Party B’s annual [[audited financial statements]].” So the [[Representations - ISDA Provision|representation]] we are after is that  you have handed over ''a fair, accurate and complete copy of those audited statements'', not that the statements ''themselves'', as prepared by the auditor are necessarily fair, accurate and complete. To get that comfort, we have the auditor’s own representation of the company’s financial condition, and we don’t need yours.}}
 
{{Specified Information and Breach of Agreement}}
 
{{ref}}

Revision as of 06:04, 21 February 2020

2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual™

Resources and navigation

[[{{{1}}} - 1992 ISDA Provision|This provision in the 1992]]

Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project
Navigation Preamble | 1(a) (b) (c) | 2(a) (b) (c) (d) | 3(a) (b) (c) (d) (e) (f) (g) | 4(a) (b) (c) (d) (e) | 55(a) Events of Default: 5(a)(i) Failure to Pay or Deliver 5(a)(ii) Breach of Agreement 5(a)(iii) Credit Support Default 5(a)(iv) Misrepresentation 5(a)(v) Default Under Specified Transaction 5(a)(vi) Cross Default 5(a)(vii) Bankruptcy 5(a)(viii) Merger Without Assumption 5(b) Termination Events: 5(b)(i) Illegality 5(b)(ii) Force Majeure Event 5(b)(iii) Tax Event 5(b)(iv) Tax Event Upon Merger 5(b)(v) Credit Event Upon Merger 5(b)(vi) Additional Termination Event (c) (d) (e) | 6(a) (b) (c) (d) (e) (f) | 7 | 8(a) (b) (c) (d) | 9(a) (b) (c) (d) (e) (f) (g) (h) | 10 | 11 | 12(a) (b) | 13(a) (b) (c) (d) | 14 |

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Sections(d) 3(d) in a Nutshell

Use at your own risk, campers!
3(d) Accuracy of Specified Information. The Specified Information designated as being subject to this Section 3(d) representation is, as at its stated date, materially accurate and complete.

Full text of Sections(d) 3(d)

3(d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect.

Related agreements and comparisons

Click here for the text of Section 3(d) in the 1992 ISDA
Click to compare this section in the 1992 ISDA and 2002 ISDA.

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References