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Amwelladmin (talk | contribs) m (Amwelladmin moved page Loss - ISDA Provision to Loss - 1992 ISDA Provision) |
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{{isda92anat|Loss}} | {{isda92anat|Loss}} | ||
{{ | {{isda92prov|Loss}} is a means of valuing {{isda92prov|Transactions}} following their {{isda92prov|Early Termination}} under the {{1992isda}}. Spoddy point: unlike its alternative {{isda92prov|Market Quotation}}, “{{isda92prov|Loss}}” ''includes'' the “{{isda92prov|Unpaid Amount}}” concept in its definition: | ||
:''...{{ | :''...{{isda92prov|Loss}} includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant {{isda92prov|Early Termination Date}} and not made, except, so as to avoid duplication, if Section {{isda92prov|6(e)(i)}}(1) or (3) or {{isda92prov|6(e)(ii)}}(2)(A) applies...'' | ||
===Duplication? What duplication? Ohhhh — ''that'' duplication.=== | ===Duplication? What duplication? Ohhhh — ''that'' duplication.=== | ||
The “except, so as to avoid duplication” coda ''looks'' to be a magnificent piece of ISDA discombobulation, because at first blush there doesn’t seem any risk of duplication: the excluded paragraphs all deal exclusively with {{isdama}}s where {{ | The “except, so as to avoid duplication” coda ''looks'' to be a magnificent piece of ISDA discombobulation, because at first blush there doesn’t seem any risk of duplication: the excluded paragraphs all deal exclusively with {{isdama}}s where {{isda92prov|Market Quotation}}, and not {{isda92prov|Loss}}, applies. So this {{isda92prov|Loss}} definition seems entirely irrelevant ... until you notice that {{isda92prov|Settlement Amount}} used when valuing with Market Quotation defaults to {{isda92prov|Loss}}<ref>{{isda92prov|Loss}} ''not counting {{isda92prov|Unpaid Amounts}}'', that is — makes you weep doesn’t it?</ref> when, as most assuredly it will, {{isda92prov|Market Quotation}} turns out to be a totally impractical means of valuing a {{isda92prov|Terminated Transaction}}, since ''no-one will give you a price for a trade they can’t actually enter''. | ||
So it ''is'' a piece of massive discombobulation, but for a deeper reason than appears at first — namely, that {{ | So it ''is'' a piece of massive discombobulation, but for a deeper reason than appears at first — namely, that {{isda92prov|Market Quotation}} is waste of space anyway. | ||
Whatever, it is simply magical that the ISDA drafting committee saw fit to treat {{ | Whatever, it is simply magical that the ISDA drafting committee saw fit to treat {{isda92prov|Loss}}, but ''not'' {{isda92prov|Market Quotation}}, as being converted into a {{isda92prov|Termination Currency Equivalent}} and including {{isda92prov|Unpaid Amounts}}, especially as {{isda92prov|Loss}} is a fallback when {{isda92prov|Market Quotation}} fails to work, as inevitably it will. | ||
==={{ | ==={{isda92prov|Loss}} no more=== | ||
Under the {{2002isda}} it (and {{ | Under the {{2002isda}} it (and {{isda92prov|Market Quotation}}) was superseded by the better concept of the {{isda92prov|Close-out Amount}}. | ||
{{sa}} | {{sa}} | ||
*{{ | *{{isda92prov|Market Quotation}} | ||
*{{ | *{{isda92prov|Close-out Amount}} | ||
*{{isia}} | *{{isia}} |