Events of Default - NY VM CSA Provision

2016 ISDA Credit Support Annex (VM) (New York law)
A Jolly Contrarian owner’s manual™

Resources and navigation

Resources Wikitext \| Nutshell wikitext Navigation 1 (Interpretation) \| 2 (Security Interest) \| 3 (Credit Support Obligations) \| 4 ( Conditions Precedent, Transfer Timing, Calculations and Substitutions) \| 5 (Dispute Resolution) \| 6 (Holding and Using Posted Collateral (VM)) \| 7 (Events of Default) \| 8 (Certain Rights and Remedies) \| 9 (Representations) \| 10 (Expenses) \| 11 (Miscellaneous) \| 12 (Definitions) \| 13 (Elections and Variables) Index: Click ᐅ to expand: 2016 NY VM CSA

Paragraph 7 in a Nutshell™

Use at your own risk, campers!

Paragraph 7 Events of Default Under Section 5(a)(iii)(1), it will be an Event of Default for a party if: 7(i) Fails to Transfer Collateral: it (or its Custodian (VM)) fails to Transfer any Eligible Collateral (VM), Posted Collateral (VM) or the Interest Payment (VM) when due and that failure continues for two Local Business Days after it receives notice of that failure; 7(ii) Impermissible dealing: it continuously fails to comply with any restriction in this Annex on its rights to rehypothecate or take title to Posted Collateral under Paragraph 6(c) for five Local Business Days after it receives notice of that failure; or 7(iii) Other breach of Annex: it continuously breaches any other obligation under this Annex for 30 days after it receives notice of its breach. view template

Full text of Paragraph 7

Paragraph 7 Events of Default For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will exist with respect to a party if: 7(i) that party fails (or fails to cause its Custodian (VM)) to make, when due, any Transfer of Eligible Collateral (VM), Posted Collateral (VM) or the Interest Payment (VM), as applicable, required to be made by it and that failure continues for two Local Business Days after notice of that failure is given to that party; 7(ii) that party fails to comply with any restriction or prohibition specified in this Annex with respect to any of the rights specified in Paragraph 6(c) and that failure continues for five Local Business Days after notice of that failure is given to that party; or 7(iii) that party fails to comply with or perform any agreement or obligation other than those specified in Paragraphs 7(i) and 7(ii) and that failure continues for 30 days after notice of that failure is given to that party. view template

Related agreements and comparisons

Related Agreements Click here* for the text of Section 7 in the 1994 New York law CSA* Click here* for the text of Section 6 in the 1995 English Law CSA* Click here* for the text of Section 6 in the 2016 English Law VM CSA* Comparisons Template:2nycsadiff 7 2016 VM CSA and 2016 NY Law VM CSA: click for comparison 1995 CSA and 2016 VM CSA: click for comparison

Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Content and comparisons

Quite different to the default provision under the 2016 VM CSA, because like all NY CSAs, the 2016 NY Law VM CSA version is not a Transaction. This means it needs to have its own Events of Default clause, rather than piggy-backing off the ISDA Master Agreement. It also has its own grace period, which defaults to two Local Business Days.

Quite different to the default provision under the 2016 VM CSA, because the NY version is not a Transaction. This means it needs to have its own Events of Default clause, rather than piggy-backing off the ISDA Master Agreement. It also has its own grace period, which defaults to two Local Business Days.