Default under specified transaction: Difference between revisions

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A [[default under specified transaction]], or "[[DUST]]", is a concept native to the {{isdama}} but which you may see in other master trading documentation (but not a {{gmsla}} or a {{gmra}}).
{{g}}''For the {{isdama}} provision specifically see {{isdaprov|Default Under Specified Transaction}}''<br>


[[DUST]] provides a right to terminate the master trading agreement in which it features upon a default by your counterparty under one or more transactions documented under ''different'' {{tag|Master Agreements}} ''between you and that same counterparty''.  
A [[default under specified transaction]], or “[[DUST]]”, is a concept native to the {{isdama}} but which you may see in other master trading documentation (but not a {{gmsla}} or a {{gmra}}). [[DUST]] gives a fellow the right to terminate the master trading agreement upon a default by {{sex|her}} [[counterparty]] under one or more transactions documented under ''different'' {{tag|Master Agreements}} ''between you and that same counterparty''.  


It can be compared to [[cross default]], which allows you to terminate your master agreement when the counterparty defaults under indebtedness ''to a third party'' (not you).
Compare and contrast with [[cross default]], which allows you to terminate your master agreement when the counterparty defaults under indebtedness ''to a third party'' (not you).


===Differences between cross default and DUST===
{{sa}}
*'''[[Cross default]]''' generally references indebtedbess; '''[[DUST]]''' references bilateral derivative and trading transactions whcih are not in the nature of indebtedness;
*'''[[Cross default]]''' is only triggered once a certain threshold amount of indebtedness is defaulted upon; '''[[DUST]]''' is triggered upon any breach;
*'''[[Cross default]]''' references your counterparty owes to a third party; '''[[DUST]]''' references other obligations your counterparty owes you.
 
===See also===
*[[Cross default]]
*[[Cross default]]
*{{isdaprov|Default Under Specified Transaction}} (ISDA)
*{{isdaprov|Default Under Specified Transaction}} (ISDA)
*[[Event of default]]
*[[Event of default]]
 
{{ref}}
{{isdaanatomy}}

Latest revision as of 10:57, 8 June 2023

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For the ISDA Master Agreement provision specifically see Default Under Specified Transaction

A default under specified transaction, or “DUST”, is a concept native to the ISDA Master Agreement but which you may see in other master trading documentation (but not a 2010 GMSLA or a Global Master Repurchase Agreement). DUST gives a fellow the right to terminate the master trading agreement upon a default by her counterparty under one or more transactions documented under different Master Agreements between you and that same counterparty.

Compare and contrast with cross default, which allows you to terminate your master agreement when the counterparty defaults under indebtedness to a third party (not you).

See also

References

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