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Set-off - ISDA Provision: Difference between revisions
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==={{1992ma}}=== | ==={{1992ma}}=== | ||
The {{1992isda}} does not have a specific set off provision, although it manages to define {{isdaprov|Set-off}}, however: | {{fullanat|isda|6(f)|2002}}The {{1992isda}} does not have a specific set off provision, although it manages to define {{isdaprov|Set-off}}, however: | ||
:{{clause|ISDA|Master Agreement|1992|Set-off Definition}} | :{{clause|ISDA|Master Agreement|1992|Set-off Definition}} | ||
ISDA published a provision in the [[Users Guide]] but several bespoke versions of a set-off provision developed and were used in the market. These often provided for the inclusion of '''{{isdaprov|Affiliate}}s''' in relation to the {{isdaprov|Non-defaulting Party}} or {{isdaprov|Non-affected Party}}. | ISDA published a provision in the [[Users Guide]] but several bespoke versions of a set-off provision developed and were used in the market. These often provided for the inclusion of '''{{isdaprov|Affiliate}}s''' in relation to the {{isdaprov|Non-defaulting Party}} or {{isdaprov|Non-affected Party}}. | ||
==={{2002ma}}=== | |||
The {{2002ma}} does have a set-off clause, which it borrows from the text used to build it into the 1992 version. This glorious provision appears in the box to the right. In a nutshell: | |||
{{nuts|ISDA|set-off}} | {{nuts|ISDA|set-off}} | ||
This set-off provision imagines a world where an {{isdaprov|Early Termination Amount}} is payable in one direction, while all "{{isdaprov|Other Amounts}}” are payable in the other. For example: | |||
This provision imagines a world where an {{isdaprov|Early Termination Amount}} is payable one | |||
{{Box| | {{Box| | ||
*{{isdaprov|Payer}} owes Payee an {{ETA}} of 10 | *{{isdaprov|Payer}} owes Payee an {{ETA}} of 10 | ||
| Line 32: | Line 30: | ||
Not ideal. But fixable if you're prepare to add some dramatically anal language: | Not ideal. But fixable if you're prepare to add some dramatically anal language: | ||
{{box| {{isdaprov|6(f)}} {{isdaprov|Set-Off}}. Any {{isdaprov|Early Termination Amount}} | {{box| {{isdaprov|6(f)}} {{isdaprov|Set-Off}}. Any {{isdaprov|Early Termination Amount}} ''(or any other amounts whether or not arising under this Agreement, matured, contingent and irrespective of the currency, place of payment of booking of the obligation)” payable to one party (the “Payee”) by the other party (the “Payer”), ...}} | ||
====Affiliates==== | ====Affiliates==== | ||