Template:M comp disc 2002 ISDA Close-out Amount: Difference between revisions
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A {{isdaprov|Close-out Amount}} is the replacement/termination value for a single {{isdaprov|Transaction}}, or a related group of {{isdaprov|Transaction}}s that a party calculates when closing out an ISDA, but it is not the final sum due under the {{isdama}}. Each of the determined {{isdaprov|Close-out Amount}}s feeds into the {{isdaprov|Early Termination Amount}}, which is the total net sum due under the {{isdama}} at the conclusion of the close-out process. | A {{isdaprov|Close-out Amount}} is the replacement/termination value for a single {{isdaprov|Transaction}}, or a related group of {{isdaprov|Transaction}}s that a party calculates when closing out an ISDA, but it is not the final sum due under the {{isdama}}. Each of the determined {{isdaprov|Close-out Amount}}s feeds into the {{isdaprov|Early Termination Amount}}, which is the total net sum due under the {{isdama}} at the conclusion of the close-out process. (see Section {{isdaprov|6(e)(i)}} for more on that). | ||
{{icds}} introduced the {{isdaprov|Close-out Amount}} into the {{2002ma}} to correct the total trainwreck of a close-out methodology set out in the {{1992ma}}. In the “good old days”, you valued {{isdaprov|Terminated Transaction}}s were valued according to {{isdaprov|Market Quotation}} or {{isdaprov|Loss}} and those un-intuitive and — well, flat-out ''nutso'' — “[[First Method - ISDA Provision|First]]” and “[[Second Method - ISDA Provision|Second]]” Methods. There is a “{{isda92prov|Settlement Amount}}” concept under the {{1992ma}}, but it only really relates to {{isda92prov|Market Quotation}}. | {{icds}} introduced the {{isdaprov|Close-out Amount}} into the {{2002ma}} to correct the total trainwreck of a close-out methodology set out in the {{1992ma}}. In the “good old days”, you valued {{isdaprov|Terminated Transaction}}s were valued according to {{isdaprov|Market Quotation}} or {{isdaprov|Loss}} and those un-intuitive and — well, flat-out ''nutso'' — “[[First Method - ISDA Provision|First]]” and “[[Second Method - ISDA Provision|Second]]” Methods. There is a “{{isda92prov|Settlement Amount}}” concept under the {{1992ma}}, but it only really relates to {{isda92prov|Market Quotation}}. | ||
Revision as of 13:07, 17 June 2020
See ISDA Comparison for a comparison between the 1992 ISDA and the 2002 ISDA.
A Close-out Amount is the replacement/termination value for a single Transaction, or a related group of Transactions that a party calculates when closing out an ISDA, but it is not the final sum due under the ISDA Master Agreement. Each of the determined Close-out Amounts feeds into the Early Termination Amount, which is the total net sum due under the ISDA Master Agreement at the conclusion of the close-out process. (see Section 6(e)(i) for more on that).
ISDA’s crack drafting squad™ introduced the Close-out Amount into the 2002 ISDA to correct the total trainwreck of a close-out methodology set out in the 1992 ISDA. In the “good old days”, you valued Terminated Transactions were valued according to Market Quotation or Loss and those un-intuitive and — well, flat-out nutso — “First” and “Second” Methods. There is a “Settlement Amount” concept under the 1992 ISDA, but it only really relates to Market Quotation.