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| {{isdaanat|2(c)}} | | {{Manual|MI|2002|2(c)|Section|2(c)|medium}} |
| ===[[Settlement netting]], not [[close-out netting]]===
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| Section 2(c) is about “settlement” or “payment” {{tag|netting}} — that is, the operational settlement of offsetting payments due on any day under the normal operation of the Agreement — and not the more drastic [[close-out netting]], which is the {{isdaprov|Early Termination}} of all {{isdaprov|Transactions}} under Section {{isdaprov|6}}.
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| If you want close-out netting, see here:
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| * {{isdaprov|Single Agreement}}
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| * {{isdaprov|Early Termination Amount}}
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| ===I mean, what is the point?===
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| Our [[Jolly contrarian|chief contrarian]] wonders what on earth the point of this section is, since [[settlement netting]] is a factual operational process for performing existing legal obligations, rather than any kind of variation of the parties’ rights and obligations. If you owe me ten pounds and I owe you ten pounds, and we agree to both keep our tenners, what cause of action arises? What loss is there? We have settled our existing obligations in different way.
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| To be sure, if I pay you your tenner and you ''don’t'' pay me mine, that’s a different story — but then there is no [[settlement netting]] at all. The only time one would wish to enforce [[settlement netting]] it must, ipso facto, have actually happened, so what do you think you’re going to court to enforce?
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| So, friends, this rather convoluted passage in that mighty industry standard is, as G. K. Chesterton once said - merely [[piss and wind]].
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| ===Multiple Transaction Payment Netting===
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| “'''{{isdaprov|Multiple Transaction Payment Netting}}'''” is a defined term introduced in the {{2002ma}} in place of the more clunky {{1992isda}} language set out in Section {{isdaprov|2(c)}}.
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| In the {{1992isda}}, to specify that netting across transactions would apply, you must '''disapply''' Section {{isdaprov|2(c)(ii)}}. Counterintuitive, but true (because otherwise netting only applies ''in respect of the same {{isdaprov|Transaction}}'').
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| That is partly why, in the {{2002isda}} they introduced the more intuitive {{isdaprov|Multiple Transaction Payment Netting}} concept. So now you can say "Multiple Transaction Payment Netting does (or does not) apply".
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| Good on them, eh? Of course the one person who is going to have no clue about how transaction netting works at an operational level is your ISDA negotiator. Seeing as. (per above) payment netting is an operational fact not a legal right as such, and it doesn’t need to be in the contract, and your ISDA negotiator will care not one row of buttons whether or not {{isdaprov|Multiple Transaction Payment Netting}} applies, you might think to put something diffident like “The parties will agree any Multiple Transaction Payment Netting arrangements separately as an operational matter.”
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| {{Exposure under csa}}
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| {{ISDA transaction and collateral flows}}
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| {{sa}}
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| *[[Netting]]
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| *{{isdaprov|Transaction}}
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| *{{isdaprov|Confirmation}}
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| *{{isdaprov|Office}}
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| *{{isdaprov|Multiple Transaction Payment Netting}}
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