Valuation Agent - VM CSA Provision

2016 ISDA Credit Support Annex (VM) (English law) A Jolly Contrarian owner’s manual™ Resources and navigation Resources Full wikitext | Nutshell wikitext Navigation 1 (Interpretation) | 2 (Credit Support Obligations) | 3 (Transfers, Calculations and Exchanges) | 4 (Dispute Resolution) | 5 (Title Transfer etc) | 6 (Default) | 7 (Representation) | 8 (Expenses) | 9 (Miscellaneous) | 10 (Definitions) | 11 (Elections and Variables) Index: Click ᐅ to expand: 2016 VM CSA 2018 CSD 1995 CSA Paragraph 11(d)(i) in a Nutshell™ Use at your own risk, campers! Template:Nutshell 2016 CSA 11(d)(i) view template Full text of Paragraph 11(d)(i) 11(d)(i) “Valuation Agent” means, for purposes of Paragraphs 2 and 4, the party making the demand under Paragraph 2, and, for purposes of Paragraph 5(c), the Transferee, as applicable, unless otherwise specified here: [.....] view template Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

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Summary

Just why one needs to call the person making a demand for Credit Support under a CSA a Valuation Agent, and not — well, the Party making the demand — seeing as that person is acting for themselves is not in any sense anyone’s agent (no, you can’t be your own agent, however much legal eagles would like that to be so. The principle — which I just made up but based off a real Latinism, is nemo agens in causa sua.)

The starting proposition, which hasn’t really changed since the salad days of the First Men at the dawn of the Age of Swaps, is that if you are a big enough boy to trade derivatives, you are big enough — short hand for “have a treasury function of some kind competent enough” — to calculate your own margin requirements. This largely remains the case, though there are a few categories of financial services fauna who are not: Repackaging vehicles, for one, and investment funds who have outsourced their asset management to an investment adviser for another — and those margin borrowers and hedgies with prime brokerage relationships may find them being obliged to hand over the margin function, all for fairly sensible reasons.

And show me the legal eagle who doesn’t like a multi-level waterfall replacement Valuation Agents, reference dealers, law society presidents, professional arbitrators and other fallback waifs and strays should the parties not enjoy their agents’ valuations, should they not be forthcoming in a timely way etc.

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See also

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