Template:Isda 5(a)(vii) summ: Difference between revisions

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===Differences between {{1992isda}} and {{2002isda}} definitions of {{{{{1}}}|Bankruptcy}}===
There are two differences between the {{1992ma}} and {{2002ma}} definitions of Bankruptcy.  
There are two:
*'''Slightly more specific concept of insolvency''': firstly, in limb 4 ('''insolvency proceedings''') a new limb (A) has been included to cover action taken by an entity-specific regulator or supervisor (as opposed to a common or garden insolvency proceeding): If initiated by a regulator, the game’s up as soon as the action is taken. If initiated by a random, the action must have resulted in a winding-up order, or at least not have been discharged in ''15'' (not 30) days.
*'''Contracted [[grace period]]''': The allowable period for dismissal of an insolvency petition (under {{{{{1}}}|5(a)(vii)}}(4)) or the exercise of security over assets (under {{{{{1}}}|5(a)(vii)}}(7)) is compressed from 30 days to 15 days. This, in aggregate over the whole global market, keeps many a [[negotiator]] in meaningful<ref>“meaningful” is in the eye of the beholder, you understand.</ref> employment, and you will see many large organisations, whom you’d think would know better, amending these [[grace period]]s back to the {{1992ma}} standard of 30 days or better still, insisting on sticking with a {{1992ma}}, but upgrading every part of it to the {{2002ma}} ''except'' for the {{{{{1}}}|Bankruptcy}} and {{{{{1}}}|Failure to Pay}} [[grace period]]s. This is a simply spectacular use of ostensibly limited resources.


===Regional bankruptcy variations===
First, the {{2002ma}} has a slightly more specific concept of “insolvency”. In limb 4 ('''insolvency proceedings''') a new limb (A) has been included to cover action taken by an entity-specific regulator or supervisor (as opposed to a common or garden insolvency proceeding): If initiated by a regulator, the game’s up as soon as the action is taken. If initiated by a random creditor, the action must have resulted in a winding-up order, or at least not have been discharged in ''15'' (not 30) days.
Second, and unnervingly for those of little faith in their own accounts payble departments, the [[grace period]] in which one must arrange the dismissal of a vexations or undeserving insolvency petition (under {{{{{1}}}|5(a)(vii)}}(4)) or the exercise of security over assets (under {{{{{1}}}|5(a)(vii)}}(7)) is compressed from 30 days to 15 days. This, in aggregate over the whole global market, keeps many a [[negotiator]] in “meaningful” employment, has been a large reason why many organisations did not move to the {{2002ma}} and of those who eventually did, you will see many large organisations, whom you’d think would know better, amending these [[grace period]]s back to the {{1992ma}} standard of 30 days or better still, insisting on sticking with a {{1992ma}}, but upgrading every part of it to the {{2002ma}} ''except'' for the {{{{{1}}}|Bankruptcy}} and {{{{{1}}}|Failure to Pay}} [[grace period]]s. This is a simply spectacular use of ostensibly limited resources.
 
=====Regional bankruptcy variations=====
The Germanic lands have peculiar ideas when it comes to bankruptcy — particularly as regards [[bank]]s, so expect to see odd augmentations and tweaks to {{icds}} standard language. Will these make any practical difference? Almost certainly not: it is hard to see any competent authority in [[Germany]], [[Switzerland]] or [[Austria]] — storeyed nations all, in the long history of banking, after all — not understanding how to resolve a [[bank]] without blowing up its netting portfolio. Especially since [[Basel]], where the netting regulations were formulated, is actually ''in'' [[Switzerland]].
The Germanic lands have peculiar ideas when it comes to bankruptcy — particularly as regards [[bank]]s, so expect to see odd augmentations and tweaks to {{icds}} standard language. Will these make any practical difference? Almost certainly not: it is hard to see any competent authority in [[Germany]], [[Switzerland]] or [[Austria]] — storeyed nations all, in the long history of banking, after all — not understanding how to resolve a [[bank]] without blowing up its netting portfolio. Especially since [[Basel]], where the netting regulations were formulated, is actually ''in'' [[Switzerland]].
*[[Swiss Bankruptcy Language|Switzerland]]
*[[Swiss Bankruptcy Language|Switzerland]]
=====The market standard “[[bankruptcy]]” definition =====
=====The market standard “[[bankruptcy]]” definition =====
The ISDA {{{{{1}}}|bankruptcy}} definition is rarely a source of great controversy (except for the [[grace period]], which gets negotiated only through custom amongst ISDA [[negotiator]]s because, in its wisdom, {{icds}} thought fit to halve it from 30 days to 15 in the {{2002ma}}.  
The ISDA {{{{{1}}}|bankruptcy}} definition is rarely a source of great controversy (except for the [[grace period]], which gets negotiated only through custom amongst ISDA [[negotiator]]s because, in its wisdom, {{icds}} thought fit to halve it from 30 days to 15 in the {{2002ma}}.  
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So you have a sort of ''pas-de-deux'' between [[negotiator|negotiators]] where they argue about it for a while before getting tired, being shouted at by their [[Salespeople|business people]], and moving on to something more important to argue about, like {{{{{1}}}|Cross Default}}).<ref>This, by the way, is an [[ISDA]] In-joke. In fact, Cross Default is pretty much pointless, a fact that every [[ISDA ninja]] and [[credit officer]] knows, but none will admit on the record. It is the love that dare not speak its name.</ref>
So you have a sort of ''pas-de-deux'' between [[negotiator|negotiators]] where they argue about it for a while before getting tired, being shouted at by their [[Salespeople|business people]], and moving on to something more important to argue about, like {{{{{1}}}|Cross Default}}).<ref>This, by the way, is an [[ISDA]] In-joke. In fact, Cross Default is pretty much pointless, a fact that every [[ISDA ninja]] and [[credit officer]] knows, but none will admit on the record. It is the love that dare not speak its name.</ref>


Otherwise, the ISDA ''{{{{{1}}}|bankruptcy}}'' clause is a much loved and well-used market standard and you often see it being op-opted into other trading agreements precisely because everyone knows it and no one really argues about it.
Otherwise, the ISDA ''{{{{{1}}}|bankruptcy}}'' clause is a much loved and well-used market standard and you often see it being co-opted into other trading agreements precisely because everyone knows it and no one really argues about it.
====={{1987ma}} and Automatic Early Termination =====
====={{1987ma}} and Automatic Early Termination =====
Note, for students of history, {{isda87prov|Automatic Early Termination}} is (''was'', right? Oh, come ''on'', guys —) problematic under the {{1987ma}}.
Note, for students of history, {{isda87prov|Automatic Early Termination}} is (''was'', right? Oh, come ''on'', guys —) problematic under the {{1987ma}}.
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