83,240
edits
Template:Csa interest amount capsule: Difference between revisions
Jump to navigation
Jump to search
Template:Csa interest amount capsule (view source)
Revision as of 13:20, 6 January 2020
, 6 January 2020→{{vmcsaprov|Interest Transfer}}
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) |
||
| Line 15: | Line 15: | ||
If {{vmcsaprov|Interest Payment Netting}} does ''not'' apply, then the {{vmcsaprov|Interest Payer}} must pay interest per the agreement in the elections (at Paragraph {{vmcsaprov|11(g)(ii)}}), and note there is no proviso allowing you to cry off if paying this amount would create a new {{vmcsaprov|Delivery Amount}}. | If {{vmcsaprov|Interest Payment Netting}} does ''not'' apply, then the {{vmcsaprov|Interest Payer}} must pay interest per the agreement in the elections (at Paragraph {{vmcsaprov|11(g)(ii)}}), and note there is no proviso allowing you to cry off if paying this amount would create a new {{vmcsaprov|Delivery Amount}}. | ||
If {{vmcsaprov|Interest Payment Netting}} ''does'' apply then descend we must into the labyrinthine mind of {{icds}}. The short point is that you must work out if, on the same date, the {{ | If {{vmcsaprov|Interest Payment Netting}} ''does'' apply then descend we must into the labyrinthine mind of {{icds}}. The short point is that you must work out if, on the same date, the {{vmcsaprov|Interest Payer}} is due a cash payment under the {{vmcsa}}, and if so, net the two off and pay the balance. Again, no proviso for what happens if this payment would lead to a margin call from the {{vmcsaprov|Interest Payer}}. | ||
===={{vmcsaprov|Interest Adjustment}}==== | ===={{vmcsaprov|Interest Adjustment}}==== | ||
{{vmcsaprov|Interest Adjustment}} is a far simpler method: incoming interest is just added to the {{vmcsaprov|Credit Support Balance}}. If, on your next margin call, net, the {{vmcsaprov|Credit Support Balance}} exceeds your counterparty’s {{vmcsaprov|Exposure}} to you, you get your interest back through the normal mechanism of calling for a {{vmcsaprov|Return Amount}}. All the netting and offsetting happens automatically. The only contingency — and well spotted, {{icds}}, for this one is truly for details freaks — is if you receive ''negative'' interest on your {{vmcsaprov|Credit Support Balance}} such that it wipes out the {{vmcsaprov|Credit Support Balance}} entirely and is ''still'' unsatisfied, then the {{vmcsaprov|Interest Payer}} — and in the case of negative interest, this is the person {{vmcsaprov|Transferor}}, not the {{vmcsaprov|Transferee}} — has to pay the balance. But if you are accruing interest and calling for margin daily, the likelihood of that happening is extremely low, and it is hard to see why you couldn’t just add this to the usual margin call process as well (since it is likely to be a daily process). <br> | {{vmcsaprov|Interest Adjustment}} is a far simpler method: incoming interest is just added to the {{vmcsaprov|Credit Support Balance}}. If, on your next margin call, net, the {{vmcsaprov|Credit Support Balance}} exceeds your counterparty’s {{vmcsaprov|Exposure}} to you, you get your interest back through the normal mechanism of calling for a {{vmcsaprov|Return Amount}}. All the netting and offsetting happens automatically. The only contingency — and well spotted, {{icds}}, for this one is truly for details freaks — is if you receive ''negative'' interest on your {{vmcsaprov|Credit Support Balance}} such that it wipes out the {{vmcsaprov|Credit Support Balance}} entirely and is ''still'' unsatisfied, then the {{vmcsaprov|Interest Payer}} — and in the case of negative interest, this is the person {{vmcsaprov|Transferor}}, not the {{vmcsaprov|Transferee}} — has to pay the balance. But if you are accruing interest and calling for margin daily, the likelihood of that happening is extremely low, and it is hard to see why you couldn’t just add this to the usual margin call process as well (since it is likely to be a daily process). <br> | ||