Template:M summ Equity Derivatives 12.8(a): Difference between revisions

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Created page with "{{eqderivprov|Cancellation Amount}} is a beast of a definition. But when you boil it down, it’s pretty straightforward. It applies when terminating a {{eqderivprov|Transacti..."
 
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Importantly, by dint of Section {{eqderivprov|12.8(e)}}, the {{eqderivprov|Determining Party}} may pass through hedge breakage costs and losses.  
Importantly, by dint of Section {{eqderivprov|12.8(e)}}, the {{eqderivprov|Determining Party}} may pass through hedge breakage costs and losses.  


If it’s a beast under the 2002 defs, it was going to be worse under the (ill-fated) [[2011 ISDA Equity Derivatives Definitions]], though it seems we will never know how just bad it was going to be. But, somewhere in the multiverse, there is alternative us, in a world just like this one, only in which the market adopted the 2011 Equity Derivatives Definitions. In that accursed universe, our mortal equivalents — people who otherwise look like you and me — who live, love, survive and thrive — are enduring this enduring hardship. It falls to [[Clifford Chance]] — not without some hubris, we feel — to imagine what that alternative universe might have been like for our alternate selves:
:“This provision has been amended heavily and now runs to over 10 pages. It sets out different optional methods of calculating the transaction value, rather than following a purely replacement value approach (as under the 2002 Definitions) which was considered not to be appropriate in all cases. Greater detail is also provided as to how and when the {{eqderivprov|Cancellation Amount}} is to be determined, what data is to be taken into account and how losses/gains resulting from hedge close-outs are allocated.”
{{Nuts|Equity Derivatives|Cancellation Amount}}
{{Nuts|Equity Derivatives|Cancellation Amount}}
{{2002 ISDA Equity Derivatives Definitions Section 12.8 TOC}}
{{box|
{{2002 ISDA Equity Derivatives Definitions 12.8}}
{{2002 ISDA Equity Derivatives Definitions 12.8(a)}}
{{2002 ISDA Equity Derivatives Definitions 12.8(b)}}
{{2002 ISDA Equity Derivatives Definitions 12.8(c)}}
{{2002 ISDA Equity Derivatives Definitions 12.8(d)}}
{{2002 ISDA Equity Derivatives Definitions 12.8(e)}}
{{2002 ISDA Equity Derivatives Definitions 12.8(f)}}
{{2002 ISDA Equity Derivatives Definitions 12.8(g)}}}}

Revision as of 18:24, 19 October 2020

Cancellation Amount is a beast of a definition. But when you boil it down, it’s pretty straightforward. It applies when terminating a Transaction following an Extraordinary Event or an Additional Disruption Event.

Importantly, by dint of Section 12.8(e), the Determining Party may pass through hedge breakage costs and losses.

Cancellation Amount in a Nutshell™ (Equity Derivatives edition)

Template:Nutshell Equity Derivatives Cancellation Amount

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