Template:M summ EUA Annex (d)(i)(1): Difference between revisions

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Template:M summ EUA Annex (d)(i)(1) (view source)

Revision as of 13:51, 17 October 2023

1,784 bytes removed ,  17 October 2023
Replaced content with "{{emissions Settlement summ|euaprov}}"
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(Replaced content with "{{emissions Settlement summ|euaprov}}")
Tag: Replaced
 
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Who pays what, where and to whom, for {{{{{1}}}|Option Transaction}}s and {{{{{1}}}|Forward Transaction}}s.
{{emissions Settlement summ|euaprov}}
 
The JC is no great fan of definitions, but God only knows, in the ISDA one would have come in handy here. You know, a “'''{{euaprov|Purchase Amount}}'''” for {{euaprov|Forward Transaction}}s, or a “'''{{euaprov|Strike  Amount}}'''” for {{euaprov|Option Transaction}}s (or a “'''{{euaprov|Transaction Amount}}'''”, for both) might have been nice, given they are the key concepts in {{euaprov|Option Transaction}}s and {{euaprov|Forward Transaction}}s.
 
As for {{euaprov|Allowances to be Delivered}} — okay, there is at least a term for the physical half of that, but it’s rubbish. What about “'''{{euaprov|Delivery Amount}}'''”?
 
(To be fair to the Emissions ninjas at IETA, they ''do'' have this concept: “{{ietaprov|Contract Amount}}”).
 
Well, the JC has introduced these words into the nutshell summary to make life a bit easier to follow. Just remember they are not there in the real thing. Unless you put them in.
 
'''{{euaprov|Cash Settlement}}''': Trick question. There ''is'' no provision for cash-settlement under the ISDA Emissions Annex. Will that stop counterparties asking you to specify a settlement method? Probably not. Does it matter? Also probably not. What if you ''want'' a cash settlement option? Not out of the ballpark — ones eligibility for EMIR, and as such hedge exempotions, might depend on whether the forward is cash settlable, in theory, or not. There is no good reason for this: it springs from the paranoid brow of those toiler legal counsel who trying to parse the [[De minimis threshold test|eligibility or Emissions derivatives under the refitted delegated regulations of MiFID 2]] — our advice is just don’t go there — but you just never know.
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