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Template:M summ 2018 CSD 13(h): Difference between revisions
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===What did they ''need'' to achieve? Straightforward=== | ===What did they ''need'' to achieve? Straightforward=== | ||
All this provision does is describe when a {{imcsdprov|Secured Party}} can actually take the initial margin the {{imcsdprov|Custodian (IM)}} is holding for it. You should not be surprised to hear this should be, more or less, ''when the Chargor has defaulted'' — and, really, the control of secured collateral held under {{imcsdprov|Control Agreement}} would ordinarily be most suitably dealt ''by that {{imcsdprov|Control Agreement}}''. The clue | All this provision does is describe ''when'' a {{imcsdprov|Secured Party}} can actually take the [[initial margin]] the {{imcsdprov|Custodian (IM)}} is holding for it. | ||
You should not be surprised to hear this should be, more or less, ''when the Chargor has actually defaulted and been closed out'' — and, really, the control of secured collateral held under {{imcsdprov|Control Agreement}} would ordinarily be most suitably dealt ''by that {{imcsdprov|Control Agreement}}''. The clue, surely, is in the name? | |||
Until the {{isdama}} has been fully closed out and the {{isdaprov|Early Termination Amount}} — that is, the total amount due following termination and valuation of all {{isdaprov|Transaction}}s following the default — determined, you don’t definitively know what you are owed, so what business have you got appropriating the Initial Margin? Nor do you have any credit risk over it: it is held at a thiurd party and secured in your favour. ''Cool your jets''. | |||
But that would be too easy and not nearly circuitous enough. How are you meant to keep armies of [[legal eagle]]s employed if it is as straightforward as that? | But that would be too easy and not nearly circuitous enough. How are you meant to keep armies of [[legal eagle]]s employed if it is as straightforward as that? | ||