Notification Time - CSA Provision
Said paragraph provides:
- 11(c)(iv) “Notification Time” means 1:00 p.m., London time, on a Local Business Day, unless otherwise specified here: ...
Relevant for the definition of Settlement Day and collateral Transfers: basically, as per the flush wording at the end of Paragraph 3(a) if a demand for a transfer is received after the Notification Time on a given date, the relevant transfer will made on the Settlement Day after the day on which the Transfer demand was made.
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.
- A Transferee may demand a Delivery Amount (Para 2(a)) or a Return Amount Para 2(b)) “on or promptly following a Valuation Date”.
- A “Valuation Date” means a day on which banks are open in at least one Valuation Date Location for each party.
- 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.
- Any Delivery Amount or Return Amount must be made (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).
- A “Regular Settlement Day” means the same Local Business Day — careful: as defined in the 1995 English Law CSA, not the ISDA Master Agreement — on which the demand is made.
- A “Local Business Day” (under the 1995 English Law 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 English Law CSA).