Template:Csa Rights and Remedies summ: Difference between revisions
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 2: | Line 2: | ||
====Final Returns==== | ====Final Returns==== | ||
All versions get to more or less the some place: Once all | All versions get to more or less the some place: Once all {{{{{1}}}|Obligation}}s are fully settled (with an exception for {{isdaprov|Tax}}es — we suppose because they could be imposed retrospectively, so it’s impossible to discharge them definitively — the {{{{{1}}}|Secured Party}} has to give the {{{{{1}}}|Posted Credit Support}} back. | ||
This ought to happen automatically where we are talking about [[variation margin]] — [[Q.E.D.]], if your {{{{{1}}}|Obligation}}s are all settled you have no {{{{{1}}}|Exposure}} so your counterparty has no grounds to hold {{{{{1}}}|Posted Credit Support}} — but for {{{{{1}}}|Independent Amount}}s or initial margin posted under an {{imcsd}}, this is not necessarily the case: the CSA itself might specify an ''independent'' {{{{{1}}}|Independent Amount}} that is not conditional on any {{{{{1}}}|Transaction}}. (This is not how most dealers handle initial margin their swaps — it tends to be {{{{{1}}}|Transaction}}-specific — but this is how the original CSAs were conceived at the time of the [[First Men]].) | |||
Revision as of 15:33, 9 May 2024
{{Csa Rights and Remedies summ {{{1}}}|{{{1}}}}}
Final Returns
All versions get to more or less the some place: Once all {{{{{1}}}|Obligation}}s are fully settled (with an exception for Taxes — we suppose because they could be imposed retrospectively, so it’s impossible to discharge them definitively — the {{{{{1}}}|Secured Party}} has to give the {{{{{1}}}|Posted Credit Support}} back.
This ought to happen automatically where we are talking about variation margin — Q.E.D., if your {{{{{1}}}|Obligation}}s are all settled you have no {{{{{1}}}|Exposure}} so your counterparty has no grounds to hold {{{{{1}}}|Posted Credit Support}} — but for {{{{{1}}}|Independent Amount}}s or initial margin posted under an 2018 English law IM CSD, this is not necessarily the case: the CSA itself might specify an independent {{{{{1}}}|Independent Amount}} that is not conditional on any {{{{{1}}}|Transaction}}. (This is not how most dealers handle initial margin their swaps — it tends to be {{{{{1}}}|Transaction}}-specific — but this is how the original CSAs were conceived at the time of the First Men.)