Local Business Day - ISDA Provision

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2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual

Definition of Local Business Day in a Nutshell
Use at your own risk, campers!

Local Business Day” means a General Business Day:

(a) For performing one’s general obligations: where specified in the Confirmation and where any relevant settlement system is operating;
(b) For working out when a Waiting Period expires: Where the Illegality or Force Majeure Event occurs,
(c) For any other payment: Where the account is located and, the principal financial centre for the relevant currency;
(d) For communications: For the recipient (and, for a Change of Account, where the new account will be located); and
(e) For a Default under Specified Transaction: In the relevant locations for performance under the Specified Transaction.

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Definition of Local Business Day in full

Local Business Day” means

(a) in relation to any obligation under Section 2(a)(i), a General Business Day in the place or places specified in the relevant Confirmation and a day on which a relevant settlement system is open or operating as specified in the relevant Confirmation or, if a place or a settlement system is not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement,
(b) for the purpose of determining when a Waiting Period expires, a General Business Day in the place where the event or circumstance that constitutes or gives rise to the Illegality or Force Majeure Event, as the case may be, occurs,
(c) in relation to any other payment, a General Business Day in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment and, if that currency does not have a single recognised principal financial centre, a day on which the settlement system necessary to accomplish such payment is open,
(d) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), a General Business Day (or a day that would have been a General Business Day but for the occurrence of an event or circumstance which would, if it occurred with respect to payment, delivery or compliance related to a Transaction, constitute or give rise to an Illegality or a Force Majeure Event) in the place specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and
(e) in relation to Section 5(a)(v)(2), a General Business Day in the relevant locations for performance with respect to such Specified Transaction.

Line breaks added to improve comprehension
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Related agreements and comparisons

Related Agreements
Click here for the text of Section Local Business Day in the 1992 ISDA
Template:Isdadiff Local Business Day

Resources and navigation

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

Index — Click ᐅ to expand:

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Content and comparisons

Helpfully, Local Business Day is also defined in the 1995 ISDA CSA. Nevertheless, the 2002 ISDA’s Local Business Day definition is, to connoisseurs, the last word in excellent legal drafting.


How the business days work for demands under a Credit Support Annex

This should give you an insight into why lawyers find ISDA documentation so compelling.

  • Each party can specify however many Valuation Date Locations it likes.
  • Tip: the fewer you specifiy, the greater the chance none will be open on a given day, and you will be excused from a margin call, so don’t overdo it. One should be ample.



See also

The many gorgeous, multi-hued variations on the business day can be enjoyed as follows:

Spoiler: the ISDA one is, by far, the best.