Parties - Emissions Annex Provision
EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions
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See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs
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Some wiggliness with words here: in an Allowances Transaction one is either delivering Allowances, in which case you are the Seller of a Forward Sale Transaction, the Seller of a Call Option (i.e., you have the obligation to deliver Allowances when called) or the Buyer of a Put Option (i.e., you have the right to deliver Allowances), or you are receiving Allowances, in which case you are the Buyer under a Forward Purchase Transaction, the Buyer of a Call Option (i.e., you have the right to call for Allowances to be delivered to you) or you are the Seller of a Put Option (i.e., you have the obligation to take delivery Allowances when they are put to you).
The EFET Allowances Appendix prefers just Seller and Buyer and doesn’t really use the term “Delivering Party” or “Receiving Party” — except in a completely different context relating to tax, which is sort of stupid, , but the IETA Master Agreement and the ISDA EU Emissions Annex have a bob each way.
Dear old ISDA’s crack drafting squad™ have even managed to make a dog’s breakfast of this, by introducing two terms for the same party, depending on its role in the Transaction, and the type of Transaction.
- The JC’s famous Nutshell™ summary of this clause
In general terms: