Sovereign: Difference between revisions
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One of {{t|ISDA}}’s vaunted {{tag|netting}} categories. | {{a|g|[[File:Percy and Queenie.png|450px|center|thumb|A [[sovereign]], yesterday]]}}One of {{t|ISDA}}’s vaunted {{tag|netting}} categories. | ||
{{ | {{quote| | ||
{{sovereign}} | {{sovereign}} | ||
<small><small>''[[:template:sovereign|view template]]''</small></small> | <small><small>''[[:template:sovereign|view template]]''</small></small> | ||
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Also one who might claim [[sovereign immunity]], a status likely to get all your resident [[chicken licken]]s squawking and gabbling, though in the context of a daily margined [[master trading agreement]], less of a drama than it might seem. | Also one who might claim [[sovereign immunity]], a status likely to get all your resident [[chicken licken]]s squawking and gabbling, though in the context of a daily margined [[master trading agreement]], less of a drama than it might seem. | ||
Of course sovereigns are just the types to go " | Of course sovereigns are just the types to go "who’s queen?" and refuse to provide you with [[credit support]]. | ||
{{ | Or claim [[sovereign immunity]]; as to which there is more to say [[Waiver of immunities - ISDA Provision|elsewhere]]. | ||
{{sovereign immunity and closeout}} | |||
{{sa}} | |||
*[[Sovereign immunity]] | |||
*[[ISDA netting categories]] | *[[ISDA netting categories]] | ||
*[[close-out netting]] | *[[close-out netting]] | ||
*[[ISDA Anatomy]] | *[[ISDA Anatomy]] | ||
{{ref}} | |||
{{c| | {{c|Netting Categories}} | ||
Latest revision as of 15:46, 21 September 2021
 A sovereign, yesterday
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One of ISDA’s vaunted netting categories.
Sovereign: A sovereign nation state recognized internationally as such, typically acting through a direct agency or instrumentality of the central government without separate legal personality, for example, the ministry of finance, treasury or national debt office. This category does not include a State of a Federal Sovereign or other political sub-division of a sovereign nation state if the sub-division has separate legal personality (for example, a Local Authority) and it does not include any legal entity owned by a sovereign nation state (see “Sovereign-owned entity”).
view template
Also one who might claim sovereign immunity, a status likely to get all your resident chicken lickens squawking and gabbling, though in the context of a daily margined master trading agreement, less of a drama than it might seem.
Of course sovereigns are just the types to go "who’s queen?" and refuse to provide you with credit support.
Or claim sovereign immunity; as to which there is more to say elsewhere.
Sovereign immunity and close-out netting
Does the fact that a counterparty may have, or may claim, sovereign immunity from legal proceedings before a foreign court (or its own courts, for that matter) invalidate a close-out netting clause?
We think not: the close-out mechanism does not require the intervention of any court to work: it is a self-help remedy. You terminate, net off and walk away.[1] To the contrary, it would only come before a court were the Defaulting Party to apply to the court to challenge its exercise. And you can’t have it both ways: a sovereign immunity right only avails you if you stay away from court. The moment Queenie puts the matter before a court she submits to the court and, Q.E.D., waives her immunity. Sorry, Your Majesty: I don’t make the rules.