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The ISDA Schedule does contain an election for {{isdaprov|Calculation Agent}} but, curiously, the term isn’t otherwised defined or used in either version of the {{isdama}}. The parties may spend a great deal of fruitless energy in haggling, at {{isdaprov|Part 4(e)}} of the {{isdaprov|Schedule}}, about who should be the {{isdaprov|Calculation Agent}}, and what rights the other poor sap should have to challenge its determinations. How strongly each feels about this will depend on the sort of products they’re expecting to trade: [[FX]] and simple [[equity derivative|equity derivatives]] have a deep, liquid, observable markets, and as there’s little scope for picking a fight, a | The ISDA Schedule does contain an election for {{isdaprov|Calculation Agent}} but, curiously, the term isn’t otherwised defined or used in either version of the {{isdama}}. The parties may spend a great deal of fruitless energy in haggling, at {{isdaprov|Part 4(e)}} of the {{isdaprov|Schedule}}, about who should be the {{isdaprov|Calculation Agent}}, and what rights the other poor sap should have to challenge its determinations. | ||
I hope it isn’t too disappointing to hear if your counterparty is a [[broker-dealer]] and you are not, your counterparty will insist on being the Calculation Agent. | |||
How strongly each feels about this will depend on the sort of products they’re expecting to trade: [[FX]] and simple [[equity derivative|equity derivatives]] have a deep, liquid, observable markets, and as there’s little scope for picking a fight, a [[dealer]]{{isdaprov|Calculation Agent}} may not be bothered about ceding rights to dispute its calculations. Expect a different reaction should you seek to second-guess your [[dealer]]’s marks on exotic [[credit derivative|credit derivatives]], on the other hand. These rely enormously on the dealer’s internal models, pricing curves and other kinds of idiosyncratic financial [[bullshit|alchemy]] that are almost certainly unique to the [[dealer]] in question. | |||
====Co-calculation Agent==== | |||
There's an old saying: | |||
''Co-Calculation Agent is No Calculation Agent.'' | |||
However superficially neat this might seem to the age-old dilemma of who should price the trade, it suffers in one important respect: unless the parties agree on the determination, the parties — er — ''won't'' agree on the determination. And then what do you do? | |||
====Other ISDA booklets==== | |||
The term is defined separately in each definition booklet: | The term is defined separately in each definition booklet: |