Template:Isda Schedule Part 1 summ
A {{{{{1}}}|Specified Entity}} is any affiliate of a counterparty to an ISDA Master Agreement which is designated in the relevant Schedule.
It is relevant to the definition of {{{{{1}}}|Cross Default}} and {{{{{1}}}|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified.
It is so (~ cough ~) important that it is, literally, the first thing you see when you regard an ISDA {{{{{1}}}|Schedule}}.
The same concept in both versions of the ISDA Master Agreement only with different clause numberings. {{{{{1}}}|Specified Entity}} is relevant to:
- {{{{{1}}}|DUST}}
- {{{{{1}}}|Cross Default}}
- {{{{{1}}}|Bankruptcy}}
- {{{{{1}}}|Credit Event Upon Merger}}
And of course the {{{{{1}}}|Absence of Litigation}} representation. Let’s not forget that.
Each party designates its Specified Entities for each of these events in Part 1(a) of the Schedule, which gives the Schedule its familiar layout:
|
(a) “Specified Entity” means in relation to Party A for the purpose of:―
and in relation to Party B for the purpose of:― |
Now, why would anyone want different Affiliates to trigger this a {{{{{1}}}|Event of Default}} depending precisely upon how they cork-screwed into the side of a hill? Well, there is one reason where it might make a big difference when it comes to {{{{{1}}}|Bankruptcy}}, and we will pick that up in the premium section. But generally — and even in that case, really — in our time of variation margin it really ought not to be the thing that is bringing down your ISDA Master Agreement.
Note it also pops up as relevant in the “{{{{{1}}}|Absence of Litigation}}” representation in Section {{{{{1}}}|3(c)}} of the 2002 ISDA.