Change of Account - ISDA Provision

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2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual

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Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project
Navigation Preamble | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14
Events of Default: 5(a)(i) Failure to Pay or Deliver5(a)(ii) Breach of Agreement5(a)(iii) Credit Support Default5(a)(iv) Misrepresentation5(a)(v) Default Under Specified Transaction5(a)(vi) Cross Default5(a)(vii) Bankruptcy5(a)(viii) Merger without Assumption
Termination Events: 5(b)(i) Illegality5(b)(ii) Force Majeure Event5(b)(iii) Tax Event5(b)(iv) Tax Event Upon Merger5(b)(v) Credit Event Upon Merger5(b)(vi) Additional Termination Event

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Section 2(b) in a Nutshell
Use at your own risk, campers!

2(b) Change of Account. Either party may change its standard settlement instructions by five Local Business Days’ notice before any Scheduled Settlement Date but the other party may make reasonable objections to such a change.
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Full text of Section 2(b)

2(b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the Scheduled Settlement Date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change.
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Related agreements and comparisons

Related Agreements
Click here for the text of Section 2(b) in the 1992 ISDA
Template:Isdadiff 2(b)

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Content and comparisons

But for the new definition of Scheduled Settlement Date in the 2002 ISDA, the 1992 ISDA text is formally the same.


ISDA’s crack drafting squad™ phoning it in, I’m obliged to say, and not minded to make any better a job of it when given the opportunity in 2002.

One can (and — cough — does) accuse finance lawyers of a yen for over-determinism in their drafting: no contingency, however remote or commercially obtuse, is left unaddressed, for fear of the consequences should it come about and the parties not find it in themselves to act like sentient adults and figure it out between them.

And what happens if the recipient makes a “reasonable objection”, and for that matter what could such a “reasonable objection” conceivably be?

Who can say?

ISDA’s crack drafting squad™ got to the edge of the cliff — it tacitly realises your counterparty might do something stupid, like changing its address for notices to a rural delivery run off the grid in the Sudan — but couldn’t be bothered to dream up a way out if it does.

Yet, curiously, in almost thirty years the Queen’s Bench Division has not been called on to arbitrate on who should give way in the event of such an impasse.

Odd, that.

See also