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Cancellation Amount - Equity Derivatives Provision: Difference between revisions
Cancellation Amount - Equity Derivatives Provision (view source)
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{{fullanat|eqderiv|12.8(a)|}} | {{fullanat|eqderiv|12.8(a)|}} | ||
{{eqderivprov|Cancellation Amount}} is a beast of a definition. But when you boil it down, it's pretty straightforward. It applies when terminating a transaction following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}. | {{eqderivprov|Cancellation Amount}} is a beast of a definition. But when you boil it down, it's pretty straightforward. It applies when terminating a transaction following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}. | ||
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{{Nuts|Equity Derivatives|Cancellation Amount | If it's a beast under 2002, it's worse under the (ill fated) [[ISDA 2011 Equity Derivative Definitions]]. Quoth [[Clifford Chance]]: | ||
:“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 {{eqderivprov|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.” | |||
{{Nuts|Equity Derivatives|Cancellation Amount}} | |||
{{2002 ISDA Equity Derivatives Definitions Section 12.8 TOC}} | {{2002 ISDA Equity Derivatives Definitions Section 12.8 TOC}} | ||