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Template:M summ 2018 CSD 13(h): Difference between revisions
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→What did they achieve? An unholy mess
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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. | 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? | ===What ''did'' they achieve?=== | ||
An unholy mess. The “unless otherwise specified” option allows a Secured Party to access collateral from the Designation of an Early Termination Date — an arbitrary date, in the future, at which time you do not know whether you are even owed anything. You don’t even know whether you are owed anything ''on'' the Early Termination Date for that matter. | |||
You are able, by electing “{{imcsdprov|Failure to Pay Early Termination Amount}}” to allow access to Collateral at the point where the {{isdaprov|Early Termination Amount}} has been determined and the party required to pay it has not done so — which we think is the appropriate time — ''but only if the {{isdaprov|Early Termination Amount}} resulted from an {{isdaprov|Event of Default}}. Not if it arose from a Section {{isdaprov|5(b)}} {{isdaprov|Termination Event}}. | |||
''Or'' you can elect to let your {{imcsdprov|Control Agreement}} govern. | |||
===What would the JC suggest?=== | |||
If you can resist the urge to fire them at ISDA’s headquarters, you can damn the torpedoes and take the [[JC]]’s recommendation, as discussed below. | |||