Long-Stop Date - Emissions Annex Provision
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EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions A Jolly Contrarian owner’s manual™
Long-Stop Date in all its glory
Comparison See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs
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Overview
Relevant for Suspension Events, and to be compared with Settlement Disruption Events
Summary
Just what ISDA’s crack drafting squad™ thought it was up to here is anyone’s guess, but it sure as hell is arbitrary. Were they smoking something? It is really hard to account for this drafting any other way.
IN ANY CASE — if you have suffered a Suspension Event (meaning your Registry is unavoidably closed so you can’t settle transfers of Allowances) this Heath Robinson scheme divides the Fourth Compliance Period into arbitrary two year periods, and sets the Long-Stop date half a year after the end of these.
Which results in a weird outcome we are almost certain people will overwrite: If your delivery obligation fell on the 29th December 2023, your Long-Stop Date would be 1 June 2024, just six months away. If it fell just five days later on the 3rd of January 2024, your Long-Stop Date is 1 June 2027, two and a half years away.
You sense the ’squad was getting tired here, fed up with the abject lack of feedback from the working group, thought, “look, no-one will read this shit anyway, and if they do they’ll overwrite it” (er ... correct) so let’s just put in something random and move on.
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- The JC’s famous Nutshell™ summary of this clause