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This latter piece involved some canny financial engineering. The general rules of [[set-off]] require not just a mutuality of parties to the off-setting claims, but also amounts falling due on the same day and in the same currency — neither of which was necessarily true of independent {{isdaprov|Transaction}}s executed under an multi-currency, cross-border {{isdama}}. | This latter piece involved some canny financial engineering. The general rules of [[set-off]] require not just a mutuality of parties to the off-setting claims, but also amounts falling due on the same day and in the same currency — neither of which was necessarily true of independent {{isdaprov|Transaction}}s executed under an multi-currency, cross-border {{isdama}}. | ||
The answer was this concept of the “{{isdaprov|Single Agreement}}”: the over-arching agreement that, however independent and self-contained Transactions are for any other purpose, when it comes to their Early Termination they transmogrify themselves into the single host agreement, and are reduced to calculation inputs to the final amount which one party must pay the other. | The answer was this concept of the “{{isdaprov|Single Agreement}}”: the over-arching agreement that, however independent and self-contained Transactions are for any other purpose, when it comes to their Early Termination they transmogrify themselves into the single host agreement, and are reduced to calculation inputs to the final amount which one party must pay the other. Thereby the process is not one of “[[set-off]]” at all, but of calculating a single net amount, by the {{2002ma}} being labelled the Early Termination Amount, payment of which would sort out all matters outstanding under the relationship. | ||
As far as we know, this concept first landed in the {{1987ma}}, where it was offhandedly referred to in the preamble, and was promoted to a fully-fledged subclause of Section 1 in the {{1992ma}}. | |||