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Counterparts and Confirmations - ISDA Provision: Difference between revisions
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Counterparts and Confirmations - ISDA Provision (view source)
Revision as of 13:04, 13 March 2019
, 13 March 2019→Section {{isdaprov|9(e)(ii)}} {{isdaprov|Confirmation}}s
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If there is a dispute about the terms of your {{isdaprov|Confirmation}}, you are going to have to pull the tapes. | If there is a dispute about the terms of your {{isdaprov|Confirmation}}, you are going to have to pull the tapes. | ||
There are some very good reasons for this. Firstly, the original trade was done by the trader with the trading mandate. | There are some very good reasons for this. Firstly, the original trade was done by the trader with the trading mandate. The confirmation will be punted out by some dude in [[Operations|ops]] who might not be able to read the trader’s handwriting. Ops can and will get things wrong. That is correctable on the record. The trader doesn't “get things wrong”. If she does, you're into [[mistake]] territory. The law on [[contractual mistake]]s is beloved by students of the law and misunderstood by everyone else. But generally, if the trader erroneously executes a trade, and the trader’s counterparty understands it correctly, the trader, and the firm she works for, will be bound by the error. That's not a [[contractual mistake]]. It's just a bad trade. | ||
By contrast, a settlements and reconciliations dude who sends out a confirm which carelessly misinterprets the trade log is not making a contractual mistake: he is ''incorrectly recording the contract''. That wasn't the trade (good or bad) that the trader did. | |||
Similarly, the reconciliations dude who sends out a confirm ''which corrects an error made by the trader'' has no mandate to make that change. The error is the trader’s. The trader should live with it, and throw herself at the mercy of the jurisprudence of [[contractual mistake]]s if need be: it is not for said reconciliations dude to pull her out of a hole. | Similarly, the reconciliations dude who sends out a confirm ''which corrects an error made by the trader'' has no mandate to make that change. The error is the trader’s. The trader should live with it, and throw herself at the mercy of the jurisprudence of [[contractual mistake]]s if need be: it is not for said reconciliations dude to pull her out of a hole. | ||