Disputed Calculations or Valuations - CSA Provision: Difference between revisions

The {{isdaprov|Transaction}} {{isdaprov|Exposure}} has — potentially — a different complexion. While some asset classes ([[FX]], [[synthetic equity]]) are pretty observable and, in the same way, there is not much to argue about, others are not. The less liquid a transaction is, the less likely the broker is to refuse any dispute rights when carrying out its {{isdaprov|Calculation Agent}} function under the {{tag|ISDA}}.

It may seem so, but in practice no. Firstly, the dispute mechanism in the CSA, while fulsome, reflects the uncynical attitude of yesteryear in its aspirations for what third party {{isdaprov|Reference Market-Makers}} will be prepared to do to help a fellow market participant out. It depends on the better angels of a {{isdaprov|Reference Market-maker}}’s nature — neigh, ''four'' of the blighters — in providing firm quotations to be dissected, arithmetically averaged and arranged for the delight of all. But a moment’s reflection should tell you that a {{isdaprov|Reference Market-maker}} doesn’t ''have'' a better nature. Such a chap is certain not to provide a quote, which brings them no benefit (they can’t get a trade out of it) and saddles them with risk — albeit only the [[Chicken Licken]] sort of risk that [[Mediocre lawyer|assiduous attorneys]] like to busy themselves, namely the allegation that your [[bad faith]] or [[negligence]] has somehow caused irreparable harm to the interests of another market participant<ref>The best defence to such an action, if you were wondering, is not to act in bad faith and to be competent in what you do. But that’s as may be: [[Chicken Licken]] is really only the excuse one wheels out for not wasting time doing something for which you get no benefit.