Close-out Cost of Carry Amount - Emissions Annex Provision

EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions

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Close-out Cost of Carry in a Nutshell™

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Close-out Cost of Carry in all its glory

Close-out Cost of Carry Amount: Means an amount in EUR equal to: (a) the Close-out Cost of Carry Rate; multiplied by: (b)(i) in respect of an Allowance Forward Transaction, the Allowance Purchase Price; or (ii) in respect of an Allowance Option Transaction, the Allowance Strike Price; multiplied by: (c) the Close-out Cost of Carry Delay, divided by (d) 360. Close-out Cost of Carry Delay: Means the number of days in the period from (and including) the scheduled Payment Date to (but excluding) the date that would be the Payment Date if delivery had been made on the Final Delivery Date or Final Compliance Date (as the case may be). Close-out Cost of Carry Rate: Means a rate equal to the Floating Rate that would be determined for the period from the scheduled Payment Date to the Early Termination Date, if the Reset Date were the date that would be the Payment Date if delivery had been made on the Final Delivery Date or Final Compliance Date (as the case may be) and the applicable Floating Rate Option were “EUR-EONIA-OIS-COMPOUND”. edit

Comparison

See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs

Resources and Navigation

Index: Click ᐅ to expand:

Pro tip: for tons of information about EU ETS and EU financial services regulation see Michał Głowacki’s magnificent emissions-euets.com website.

Emissions trading documentation
ISDA: EU Anatomy • EU Wikitext • EU Nutshell (premium) • UK Anatomy • UK Wikitext (to be merged into EU Anatomy)
IETA: IETA Master Agreement • IETA Wikitext • IETA Nutshell (premium)
EFET: EFET Allowances Appendix • EFET Allowances Wikitext • EFET Nutshell (premium)

Overview

Note the Close-out Cost of Carry Amount is a per-allowance amount. This is important when factoring it into Receiving Party’s Replacement Cost, and other things.

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