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ISDA Anatomy™
In a Nutshell™ Section 4(a):
4(a) Furnish Specified Information. It will deliver to the other party (or to such government or taxing authority as it reasonably directs):—
- (i) any tax documents specified in the Schedule or any Confirmation;
- (ii) any other documents specified in the Schedule or any Confirmation; and
- (iii) any other document the other party reasonably requests to minimise withholding tax on any payment (and which would not materially prejudice the provider’s position), if need be accurately completed and executed and delivered as specified in the Schedule or such Confirmation or, otherwise as soon as reasonably practicable.
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2002 ISDA full text of Section 4(a):
4(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under clause (iii) below, to such government or taxing authority as the other party reasonably directs:―
- (i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;
- (ii) any other documents specified in the Schedule or any Confirmation; and
- (iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification, in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable.
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Click here for the text of Section 4(a) in the 1992 ISDA
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Not actually a defined term under the ISDA Master Agreement but merely a capitalised heading. In my book capitalising a heading is borderline illiteracy, but ISDA lawyers feel differently about it and I have learned which battles to pick. But at any rate the Specified Information is that stuff set out in the Schedule at Part 3.
Not providing documents for delivery is an Event of Default ... eventually
The importance of promptly sending required documents for delivery goes as follows:
- By dint of Section {{{{{1}}}|4(a)}} you agree to furnish each other {{{{{1}}}|Specified Information}} set out in {{{{{1}}}|Part 3}} of the {{{{{1}}}|Schedule}}.
- By dint of Section {{{{{1}}}|5(a)(ii)}} if you don’t then that can be a {{{{{1}}}|Breach of Agreement}} {{{{{1}}}|Event of Default}} (Section {{{{{1}}}|5(a)(ii)}}). Be warned: you must pursue a tortured chain of nested double negatives and carefully parse the interplay between Sections {{{{{1}}}|4(a)}} and {{{{{1}}}|5(a)(ii)}} to grasp this, but it is true.
- But, Section {{{{{1}}}|5(a)(ii)}} imposes a thirty freaking day grace period following notice before a {{{{{1}}}|Breach of Agreement}} counts as an {{{{{1}}}|Event of Default}} allowing termination. (A {{{{{1}}}|Failure to Pay or Deliver}} is excluded from that definition, by the way, because it has its own EOD with a much tighter grace period).
- So if you need a document “furnished” urgently and can’t wait a month for it (you might not, if you are a credit officer and it is a monthly NAV statement, for example) then you must upgrade a simple {{{{{1}}}|5(a)(ii)}} {{{{{1}}}|Breach of Agreement}} to a full-blown {{{{{1}}}|Additional Termination Event}}.
See also
References