Local Business Day - IM CSD Provision

From The Jolly Contrarian
Jump to navigation Jump to search

2018 ISDA Credit Support Deed (IM) (English law)
A Jolly Contrarian owner’s manual™

Resources and navigation

Paragraph Local Business Day in a Nutshell

Use at your own risk, campers!

Full text of Paragraph Local Business Day

Local Business Day”, unless otherwise specified in Paragraph 13, means:
(i) in relation to a transfer of cash or other property (other than securities) under this Deed, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place where the relevant Segregated Accountis located and, if different, in the principal financial centre, if any, of the currency of such payment or, as applicable, place of delivery;
(ii) in relation to a transfer of securities under this Deed, (a) a day on which the clearance system agreed between the parties for delivery of the securities is open for the acceptance and execution of settlement instructions or, if delivery of the securities is contemplated by other means, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place(s) agreed between the parties for this purpose and (b) a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place where the relevant Segregated Accountis located;
(iii) in relation to a valuation under this Deed, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place(s) agreed between the parties for this purpose; and
(iv) in relation to any notice or other communication or other reference to Local Business Day under this Deed, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place specified in the address for notice most recently provided by the recipient.

Related agreements and comparisons

Related Agreements
Click here for the text of Section Local Business Day in the 2016 ISDA VM CSA
Comparisons
2016 VM CSA and 2018 English law IM CSD: click for comparison

Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you.
Sign up for our newsletter.

Content and comparisons

Broadly the same as the 2016 VM CSA, though account must be taken of the location of the Segregated Accounts, and also the 2018 English law IM CSD has eschewed the idea of Valuation Date Locations and things like that (in favour of Calculation Date Location (IM) and so on).

Template

Summary

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

  1. Valuation and demand: A Transferee may demand a Delivery Amount (Para 2(a)) or a Return Amount Para 2(b)) “on or promptly following a Valuation Date”.
  2. Valuation Date: A “Valuation Date” means a day on which banks are open in at least one Valuation Date Location for each party.
    1. Each party can specify however many Valuation Date Locations it likes.
    2. 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.
  3. Settlement: Any Delivery Amount or Return Amount must be settled (Para 3(a)) by the close of business on the Regular Settlement Day relating to the date such demand is received (if received before the Notification Time (spoiler: usually 11 am, noon or 1pm)), or the Regular Settlement Day relating to the day after the date such demand is received (if received after the Notification Time).
  4. Regular Settlement Day: A “Regular Settlement Day” means the same Local Business Day — careful: as defined in the 1995 CSA, not the ISDA Master Agreement — on which the demand is made.
  5. Local Business Day: A “Local Business Day” (under the 1995 CSA) means, in the case of notices, a day on which banks are open in the address for the notice most recently specified by the Recipient. What if demand is made on a day that is not a Local Business Day? Simple: by dint of Section 12 of the ISDA Master Agreement, the notice will be deemed given on the next Local Business Day (as defined in the ISDA Master Agreement, not the 1995 CSA).

Easy.

Template

See also

Template

References