Difference between revisions of "Safe harbor"

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There are doubtless many more.
There are doubtless many more.
{{erisa netting}}
{{c|US Securities Regulation}}
{{c|US Securities Regulation}}

Latest revision as of 13:05, 9 October 2019

The Jolly Contrarian’s Glossary

The snippy guide to financial services lingo.™
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My port in your heavy storm.

A favourite metaphor for U.S. Securities lawyers, who find safe harbors in many unexpected places, to shelter them and their clients from the vicissitudes of:

There are doubtless many more.

ERISA netting

Famously, ERISA plans tend to be set not to net, and for the unholiest of reasons, courtesy of the phantasmagorical imagination of some wise counsel at a U.S. law firm which prudence counsels it would be wiser not to name[1], upon whom the whole market relies.

This gentleman’s opinion is predicated on the risk that a court would interpret the ERISA act as requiring the US Bankruptcy Code as it stood in 1971 to be applied to the insolvency of an ERISA plan, rather than as it stands at the time of insolvency. The reason that’s a problem is that the “safe harbors” for closing out swaps in the Bankruptcy Code were only enacted in the 1980s.

Let me say that again:

Seriously. That’s it.

It is a frankly fantastical fear: Not only is it impossible to be certain, at this remove, exactly how the US Bankruptcy Code stood in 1971 much less how it might have been interpreted in those days, but many of the institutions and concepts it relies on — including per chance, some old hippyish safe harbors from the 1960s — will have since been abolished or materially changed.

Utterly, totally, stupid.

See also

  • Definitely not Cadwalader, obviously.