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Netting of Payments - ISDA Provision: Difference between revisions
Netting of Payments - ISDA Provision (view source)
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===Multiple Transaction Payment Netting=== | ===Multiple Transaction Payment Netting=== | ||
“'''{{isdaprov|Multiple Transaction Payment Netting}}'''” is a defined term introduced in the {{2002ma}} in place of the more clunky {{1992isda}} language set out in Section {{isdaprov|2(c)}}. | |||
In the {{1992isda}}, to specify that netting across transactions would apply, you must '''disapply''' Section {{isdaprov|2(c)(ii)}}. Counterintuitive, but true (because otherwise netting only applies ''in respect of the same {{isdaprov|Transaction}}''). | In the {{1992isda}}, to specify that netting across transactions would apply, you must '''disapply''' Section {{isdaprov|2(c)(ii)}}. Counterintuitive, but true (because otherwise netting only applies ''in respect of the same {{isdaprov|Transaction}}''). | ||
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That is partly why, in the {{2002isda}} they introduced the more intuitive {{isdaprov|Multiple Transaction Payment Netting}} concept. So now you can say "Multiple Transaction Payment Netting does (or does not) apply". | That is partly why, in the {{2002isda}} they introduced the more intuitive {{isdaprov|Multiple Transaction Payment Netting}} concept. So now you can say "Multiple Transaction Payment Netting does (or does not) apply". | ||
Good on them, eh? | Good on them, eh? Of course the one person who is going to have no clue about how transaction netting works at an operational level is your ISDA negotiator. Seeing as. (per above) payment netting is an operational fact not a legal right as such, and it doesn’t need to be in the contract, and your ISDA negotiator will care not one row of buttons whether or not {{isdaprov|Multiple Transaction Payment Netting}} applies, you might think to put something diffident like “The parties will agree any Multiple Transaction Payment Netting arrangements separately as an operational matter.” | ||
{{Exposure under csa}} | {{Exposure under csa}} | ||
{{ISDA transaction and collateral flows}} | {{ISDA transaction and collateral flows}} | ||