Template:M summ EUA Annex Settlement Disruption and Suspension
Priority
The same event can be a Settlement Disruption Event and a Suspension Event: both are events beyond the control of the counterparties and for which neither is at fault (in contrast to Failure to Deliver); however as Suspension Event is narrower, relating only to the failure of formal regulatory infrastructure in which the EUAs are held and registered, has priority over the wider Settlement Disruption Event (which would take in general market settlement issues) if the same event could otherwise be both.
Notification
Either party can notify a Settlement Disruption Event; only the party affected by a Suspension Event is required to give notice. Again, we suppose this has something to do with the more general nature of settlement disruption events.
Effect of event
In each case the practical upshot of the event is that the parties’ respective obligations are suspended. The parties have to try to overcome a Settlement Disruption Event; it being realistically beyond their gift to overcome a Suspension Event, they are not required to do that.
Delayed performance
Once the event is overcome the parties must resume their obligations: for a Settlement Disruption Event, within two Delivery Business Days; for a Suspension Event, within 10 Delivery Business Days, but with a tiresome waterfall of intermediate deadlines depending on whether the Suspension Event coincides with an End of Phase Reconciliation Deadline.
The Suspension Event contemplates an additional Cost of Carry Amount payment — perhaps to reflect the fact that the delay period is a bit longer.
Continuing Settlement Disruption Events
Now things start getting properly baroque. Settlement disruption contemplates the scenario where the disruption stretches out past the original scheduled Delivery Date. After this time of course we must deal with the phantoms and succubi of unexpected reconciliation deadlines, end of phase reconciliation deadlines which of course we are not within the parties’ original contemplation, the original Delivery Date scheduled to occur before any of these could happen. At the end of a period not longer than nine Delivery Business Days after the original Delivery Date, an “Illegality” Termination Event will be deemed to occur.