Determining Party - Equity Derivatives Provision: Difference between revisions

Determining Party - Equity Derivatives Provision (view source)

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+===And the difference between {{eqderivprov|Calculation Agent}} and {{eqderivprov|Determining Party}} is?===
+In drafting the equity derivative definitions {{tag|ISDA}} was agnostic as to who would be {{eqderivprov|Calculation Agent}}, but recognised that while some calculations could be performed by whoever was Calculation Agent, {{eqderivprov|Cancellation Amount}} calculations were inextricably related to unwinding the hedge – usually in the case of a disruption – and this would naturally best be calculated by the {{eqderivprov|Hedging Party}} – being the person unwinding the hedge. If that’s not the Calculation Agent, it needed to be treated differently.
+But we would never allow the client to be either the Calculation Agent or the Determining Party so in the context of a PRT this is a purely academic point.
+If Calculation Agent == Dealer, and Dealer == Hedging Party, and Hedging Party == Determining Party, then Calculation Agent == Determining Party.
+The name of the game is to simplify to avoid language like “determination or calculation made by the Calculation Agent or Determining Party, as the case may be” throughout, which helps no one. Except my brethren in the legal profession.
 {{eqderivsnap|12.8(f)}}