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Automatic Early Termination - ISDA Provision: Difference between revisions
Automatic Early Termination - ISDA Provision (view source)
Revision as of 08:32, 19 July 2013
, 19 July 2013→Should we allow AET versus BBPLC?
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:*it is not be aware of the insolvency event (because by the time it does learn of it, and gets round to terminating its hedges, the markets have moved, leaving a [[MTM]] gap between the termination value of the Transactions and the termination value of the hedges). | :*it is not be aware of the insolvency event (because by the time it does learn of it, and gets round to terminating its hedges, the markets have moved, leaving a [[MTM]] gap between the termination value of the Transactions and the termination value of the hedges). | ||
=== | ===Applying AET against a counterparty in a jurisdiction where it is not needed=== | ||
AET is predominantly useful in jurisdictions which recognise zero-hour rules in their insolvency regimes. England is not one of those jursidictions. Playing devil's advocate I can only think of two reasons why a party might historically want to apply AET to an English company: | AET is predominantly useful in jurisdictions which recognise zero-hour rules in their insolvency regimes. England is not one of those jursidictions. Playing devil's advocate I can only think of two reasons why a party might historically want to apply AET to an English company: | ||