Template:M comp disc Equity Derivatives 12.8

12.8(b) “Means of determination”

12.8(c) “Determination”

12.8(d) “Quotations”

12.8(e) “Liquidation of hedges”

12.8(g) “Commercially reasonable procedures”

If it’s a beast under the 2002 ISDA Equity Derivatives Definitions, it was going to be worse under the (ill-fated) 2011 ISDA Equity Derivatives Definitions, though it seems, after nearly a decade of solemn inactivity, we will never now know just how bad it was going to be.

But we can take some solace that, somewhere out in the multiverse there is an alternative us, inhabiting a world just like this one, only in which the market adopted the 2011 Equity Derivatives Definitions instead of roundly ignoring them, as ours has done.

In that accursed parallel universe, our mortal equivalents — good people; kind people; people who otherwise resemble you and me, readers — who live, love and aspire to intellectual and moral fulfillment, just as we do — those poor souls have had to endure this unending hardship. We may not know, we cannot tell what pains they have had to bear, so it falls to Clifford Chance — not without some hubris, we feel — to imagine it for us:

“This provision has been amended heavily and now runs to over 10 pages. It sets out different optional methods of calculating the transaction value, rather than following a purely replacement value approach (as under the 2002 Definitions) which was considered not to be appropriate in all cases. Greater detail is also provided as to how and when the Cancellation Amount is to be determined, what data is to be taken into account and how losses/gains resulting from hedge close-outs are allocated.”

On the other hand, in that parallel universe there is also a squadron of Linklaters FPML Avenger torpedo bomber pilots that survived to a ripe old age, and now while away their days in front of the hearthstone, regaling their grandchildren about the time they saved western civilisation as we know it by converting those dangerous, texty old 2002 ISDA Equity Derivatives Definitions into machine-readable markup language.