Accuracy of Specified Information - ISDA Provision: Difference between revisions

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Accuracy of Specified Information - ISDA Provision (view source)

Revision as of 16:38, 26 June 2018

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:''“or, in the case of financial information, a fair representation of the financial condition of the relevant party, provided that the other party may rely on any such information when determining whether an Additional termination Event has occurred.”''
:''“or, in the case of financial information, a fair representation of the financial condition of the relevant party, provided that the other party may rely on any such information when determining whether an Additional termination Event has occurred.”''


This is predicated on the following reasoning: “In publishing the audit, the auditor itself is not making any greater representation than that in its view the statements are a fair representation of the financial conditions. I didn't even write the audit. Why should I give any more severe representation than the expert? How do I even know?”
This is predicated on the following reasoning: “In publishing the audit, the auditor itself is not making any greater representation than that the statements are a fair representation of the financial conditions. I’m no accountant. I didn’t even write the stupid audit. How am I supposed to know? Why should I give any a stronger representation than the expert?”


The riposte is this:
Fair questions, but they misapprehend what is being asked.The riposte is this:


{{isdaprov|The {{isdaprov|Part 3}} information you must supply is “Party B’s annual [[audited financial statements]].” So the [[Representations - ISDA Provision|representation]] we are after is that what you have handed over ''is a fair, accurate and complete copy of those audited statements'', not that the statements themselves, as prepared by the auditor are fair, accurate and complete. To get that comfort, we have the auditor’s own representation of the company’s financial condition, and we don’t need yours.}}
The {{isdaprov|Part 3}} information you must supply is “Party B’s annual [[audited financial statements]].” So the [[Representations - ISDA Provision|representation]] we are after is that you have handed over ''a fair, accurate and complete copy of those audited statements'', not that the statements ''themselves'', as prepared by the auditor are necessarily fair, accurate and complete. To get that comfort, we have the auditor’s own representation of the company’s financial condition, and we don’t need yours.}}


{{Specified Information and Breach of Agreement}}
{{Specified Information and Breach of Agreement}}


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