Change in law: Difference between revisions
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{{a|contract|}}You might want, sometimes, to capture the effect of a [[change in law]] that has not yet happened, indeed ''might'' not happen, but ''could'' happen, and if it ''did'' happen, would — ''when'' it happened — verily bugger up the careful figures you constructed under your derivatives transaction. | |||
Examples that leap to mind: If you have a forward transaction to buy emissions allowances for April 2026, and the EU announces a plan to disestablish the EU ETS in April 2025 — meaning that you really want to get your hands on the Allowance and surrender them, or sell them to someone else who wants to surrender them, now. The closer you get to the day that becomes law, the less valuable the {{euaprov|Allowances}} are, as the need to surrender them falls. So that prospective change is important immediately — even before it has become official. | |||
So here is some language for that: | |||
{{(iii) Following the announcement of any proposal to change in law or regulation or confirmation, EUAs allocated in Phase 3 (1 January 2013 to 31 December 2020) or Phase 4 (1 January 2021 to 31 December 2030) of the EU ETS will not be eligible for compliance with obligations under Phase 4 of the EU ETS (such ineligible EUAs, the | |||
Revision as of 11:56, 24 October 2023
You might want, sometimes, to capture the effect of a change in law that has not yet happened, indeed might not happen, but could happen, and if it did happen, would — when it happened — verily bugger up the careful figures you constructed under your derivatives transaction.
Examples that leap to mind: If you have a forward transaction to buy emissions allowances for April 2026, and the EU announces a plan to disestablish the EU ETS in April 2025 — meaning that you really want to get your hands on the Allowance and surrender them, or sell them to someone else who wants to surrender them, now. The closer you get to the day that becomes law, the less valuable the Allowances are, as the need to surrender them falls. So that prospective change is important immediately — even before it has become official.
So here is some language for that:
{{(iii) Following the announcement of any proposal to change in law or regulation or confirmation, EUAs allocated in Phase 3 (1 January 2013 to 31 December 2020) or Phase 4 (1 January 2021 to 31 December 2030) of the EU ETS will not be eligible for compliance with obligations under Phase 4 of the EU ETS (such ineligible EUAs, the