Template:M summ GMSLA 11

ISLA published a curious piece of thought leadership in September 2018 which painted a worst-case scenario timeline for closing out a 2018 Pledge GMSLA which made it look quite a bit worse than the corresponding critical path under a normal — hardly calculated to set at ease the jittery nerves of a very modern agent lenderer. The perceived difference was this:

2010 GMSLA	2018 Pledge GMSLA
Upon notice of default, Non-Defaulting Party can start executing to close risk and have a 5 day window in which to trade and set pricing to allow for liquidity	Upon notice of default Non-Defaulting Party can start executing immediately but have to provide a value for transfer of the pledged Collateral. In most cases Non-Defaulting Party should be able to complete execution and valuation of the Collateral to be released on day 1, but for less liquid positions it may take longer — potentially up to the permitted 5 days. Once you have valued you are locked in to that number, so if you achieve a lower price than your valuation you cannot come back on the valuation and hence would be your loss.
You then net all cashflows including fees and pay any residual or become a debtor for any shortfall	Cash flows don’t net and hence fees are not covered under the valuation. This does not sound correct, can fees not be incorporated in the SI, as this is potentially large and could put lenders off?