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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
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So this brings us to the abomination we find on the page before us. God only ''knows'' what {{icds}} ''thought'' they were ''trying'' to achieve. Whatever remote objective they had as a goal, and whatever contingencies were dogging [[the ’squad]]’s fevered subconscious as they trudged, in formation, through the moist, dengue-infested swamps of of this drafting exercise — and there is some talk that there may have been skirmishes with pockets of rogue [[Buyside counsel|buy-side advisors]] to distract them as they went waded through hip-high sludge — what is left to posterity is a confused, gibbering disaster. | So this brings us to the abomination we find on the page before us. God only ''knows'' what {{icds}} ''thought'' they were ''trying'' to achieve. Whatever remote objective they had as a goal, and whatever contingencies were dogging [[the ’squad]]’s fevered subconscious as they trudged, in formation, through the moist, dengue-infested swamps of of this drafting exercise — and there is some talk that there may have been skirmishes with pockets of rogue [[Buyside counsel|buy-side advisors]] to distract them as they went waded through hip-high sludge — what is left to posterity is a confused, gibbering disaster. | ||
===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. | 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 — the return of its own [[initial margin]], and the stuff the other guy has posted, assuming the other guy is the one who, at the end of the day, owes the money. | ||
You should not be surprised to hear this should be, more or less, ''when the {{imcsdprov|Chargor}} has actually defaulted and been closed out'' — and, really, the control of secured collateral held | You should not be surprised to hear this should be, more or less, ''when the {{imcsdprov|Chargor}} has actually defaulted and been closed out, the Early Termination Amount calculated, been found to be owed by the {{imcsdprov|Chargor}}, and the {{imcsdprov|Chargor}} having failed to pay it '' — and, really, the control of secured collateral held subject to a “{{imcsdprov|Control Agreement}}” would ordinarily be most suitably dealt ''by that {{imcsdprov|Control Agreement}}''. The clue, surely, is in the name? Well, the {{imcsd}} does its own job or determining when this would be — it does a ''horrible'' job of it, truth be told, but it is a job — so (anecdotally) the market-standard {{imcsdprov|Control Agreement}}s all tend to defer to the {{imcsdprov|Secured Party Rights Event}} as determined under the {{imcsd}}. So here we are. | ||
===What did they achieve? An unholy mess=== | |||
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 — even ''if'' you are owed anything: only one party to an {{isdama}} can be owed something, remember — so until then, what business have you got appropriating the {{imcsdprov|Initial Margin}}? Nor do you have any credit risk over it: it is held at a third party and [[secured]] in your favour. ''Cool your jets''. | 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 — even ''if'' you are owed anything: only one party to an {{isdama}} can be owed something, remember — so until then, what business have you got appropriating the {{imcsdprov|Initial Margin}}? Nor do you have any credit risk over it: it is held at a third party and [[secured]] in your favour. ''Cool your jets''. | ||
But that event — by our read, a “Failure to Pay Early Termination Amount” — isn’t even the default value for a {{imcsdprov|Secured Party Rights Event}}: rather, it is one of a tangled menu of alternatives. | But that event — by our read, a “Failure to Pay Early Termination Amount” — isn’t even the default value for a {{imcsdprov|Secured Party Rights Event}}: rather, it is one of a tangled menu of alternatives. | ||