Elections and Variables - CSA Provision

1995 ISDA Credit Support Annex (English Law)
A Jolly Contrarian owner’s manual™

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Resources Full wikitext \| Nutshell wikitext Navigation 1 (Interpretation) \| 2 (Credit Support Obligations) \| 3 (Transfers, Calculations and Exchanges) \| 4 (Dispute Resolution) \| 5 (Title Transfer etc) \| 6 (Default) \| 7 (Representation) \| 8 (Expenses) \| 9 (Miscellaneous) \| 10 (Definitions) \| 11 (Elections and Variables) Index — Click the ᐅ to expand: 1995 CSA

Paragraph 11 in a Nutshell™

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Full text of Paragraph 11

11 Elections and Variables

11(a) Base Currency and Eligible Currency.

11(a)(i) “Base Currency” means United States Dollars unless otherwise specified here:

11(a)(ii) “Eligible Currency” means the Base Currency and each other currency specified here:

11(b) Credit Support Obligations.

11(b)(i) Delivery Amount, Return Amount and Credit Support Amount.

11(b)(i)(A) “Delivery Amount” has the meaning specified in Paragraph 2(a), unless otherwise specified here:

11(b)(i)(B) “Return Amount” has the meaning specified in Paragraph 2(b), unless otherwise specified here:

11(b)(i)(C) “Credit Support Amount” has the meaning specified in Paragraph 10, unless otherwise specified here:

11(b)(ii) Eligible Credit Support. The following items will qualify as “Eligible Credit Support” for the party specified: In each case with checkboxes are for Party A; Party B; and Valuation Percentage

(A) cash in an Eligible Currency

(B) negotiable debt obligations issued by the Government of [ ] having an original maturity at issuance of not more than one year

(C) negotiable debt obligations issue by the Government of [ ] having an original maturity at issuance of more than one year but not more than 10 years

(D) negotiable debt obligation issued by the Government of [ ] having an original maturity at issuance of more than 10 years

(E) other:

11(b)(iii) Thresholds.
11(b)(iii)(A)

"Independent Amount” means with respect to Party A:

"Independent Amount” means with respect to Party B:

11(b)(iii)(B)

"Threshold” means with respect to Party A:

"Threshold” means with respect to Party B:

11(b)(iii)(C)

"Minimum Transfer Amount” means with respect to Party A:

"Minimum Transfer Amount” means with respect to Party B:

11(b)(iii)(D) Rounding. The Delivery Amount and the Return Amount will be rounded [down to the nearest integral multiple of ..../up and down to the nearest integral multiple of ...., respectively].
11(c) Valuation and Timing.

11(c)(i) “Valuation Agent” means, for purposes of Paragraphs 2 and 4, the party making the demand under Paragraph 2, and, for purposes of Paragraph 5(c), the Transferee, as applicable, unless otherwise specified here: ...

11(c)(ii) “Valuation Date” means: ...

11(c)(iii) “Valuation Time” means:

[ ] the close of business in the place of location of the Valuation Agent on the Valuation Date or date of calculation, as applicable;

[ ] the close of business on the Local Business Day immediately preceding the Valuation Date or date of calculation, as applicable;

provided that the calculations of Value and Exposure will, as far as practicable, be made as of approximately the same time on the same date.

11(c)(iv) “Notification Time” means 1:00 p.m., London time, on a Local Business Day, unless otherwise specified here: ...

11(d) Exchange Date. “Exchange Date” has the meaning specified in Paragraph 3(c)(ii), unless
otherwise specified here:
11(e) Dispute Resolution

11(e)(i) “Resolution Time” means 1:00 p.m., London time, on the Local Business Day following the date on which the notice is given that gives rise to a dispute under Paragraph 4, unless otherwise specified here: ...

11(e)(ii) Value. For the purpose of Paragraphs 4(a)(4)(i)(C) and 4(a)(4)(ii), the Value of the outstanding Credit Support Balance or of any transfer of Eligible Credit Support or Equivalent Credit Support, as the case may be, will be calculated as follows: ...

11(e)(iii) Alternative. The provisions of Paragraph 4 will apply, unless an alternative dispute resolution procedure is specified here: ...

11(f) Distributions and Interest Amount.

11(f)(i) Interest Rate. The “Interest Rate” in relation to each Eligible Currency specified below will be:

Eligible Currency ………………………………… ………………………………… …………………………………	Interest Rate ………………………………… ………………………………… …………………………………

11(f)(ii) Transfer of Interest Amount. The transfer of the Interest Amount will be made on the last Local Business Day of each calendar month and on any Local Business Day that a Return Amount consisting wholly or partly of cash is transferred to the Transferor pursuant to Paragraph 2(b), unless otherwise specified here: ...

11(f)(iii) Alternative to Interest Amount. The provisions of Paragraph 5(c)(ii) will apply, unless otherwise specified here: ...

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The varieties of ISDA CSA
Subject	1994 NY	1995 Eng	2016 VM NY	2016 VM Eng	2018 IM Eng
Preamble	Pre	Pre	Pre	Pre	Pre
Interpretation	1	1	1	1	1
Security Interest	2	-	2	-	2
Credit Support Obligations	3	2	3	2	3
Transfers, Calculations and Exchanges	-	3	-	3	-
Conditions Precedent, Transfer Timing, Calculations and Substitutions	4	-	4	-	4
Dispute Resolution	5	4	5	4	5
Holding and Using Posted Collateral	6	-	6	-	6
Transfer of Title, No Security Interest	-	5	-	5	-
Events of Default	7	6	7	6	7
Rights and Remedies	8	-	8	-	7
Representations	9	7	9	7	9
Expenses	10	8	10	8	10
Miscellaneous	11	9	11	9	11
Definitions	12	10	12	10	12
Elections and Variables	13	11	13	11	13

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Content and comparisons

The bit you fill out in a your credit support annex to make it work. It is all in a rather sacred, standardised format, which differs marginally through the different versions of the CSA. Some of the stuff relates to Base Currency, and each other Eligible Currency and so on (or just Base Currency, if you are on the 1994 New York law CSA), Eligible Credit Support, Thresholds, Minimum Transfer Amounts and so on.

Some of it gets a little more elaborate later on, but generally speaking it isn’t anything like as gruesome or torturously negotiated as the Schedule to the ISDA Master Agreement.

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