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Calculation Agent: Difference between revisions
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The ISDA Schedule does contain an election for {{isdaprov|Calculation Agent}} but, curiously, the term isn’t otherwised defined or used in either version of the {{isdama}}. The parties may spend a great deal of fruitless energy in haggling, at {{isdaprov|Part 4(e)}} of the {{isdaprov|Schedule}}, about who should be the {{isdaprov|Calculation Agent}}, and what rights the other poor sap should have to challenge its determinations. | {{a|isda|}}The ISDA Schedule does contain an election for {{isdaprov|Calculation Agent}} but, curiously, the term isn’t otherwised defined or used in either version of the {{isdama}}. The parties may spend a great deal of fruitless energy in haggling, at {{isdaprov|Part 4(e)}} of the {{isdaprov|Schedule}}, about who should be the {{isdaprov|Calculation Agent}}, and what rights the other poor sap should have to challenge its determinations. | ||
I hope it isn’t too disappointing to hear if your counterparty is a [[broker-dealer]] and you are not, your counterparty will insist on being the | I hope it isn’t too disappointing to hear if your counterparty is a [[broker-dealer]] and you are not, your counterparty will insist on being the calculation agent. | ||
How strongly each feels about this will depend on the sort of products they’re expecting to trade: [[FX]] and simple [[equity derivative|equity derivatives]] have a deep, liquid, observable markets, and as there’s little scope for picking a fight, a [[dealer]] {{isdaprov|Calculation Agent}} may not be bothered about ceding rights to dispute its calculations. Expect a different reaction should you seek to second-guess your [[dealer]]’s marks on exotic [[credit derivative|credit derivatives]], on the other hand. These rely enormously on the dealer’s internal models, pricing curves and other kinds of idiosyncratic financial [[bullshit|alchemy]] that are almost certainly unique to the [[dealer]] in question. | How strongly each feels about this will depend on the sort of products they’re expecting to trade: [[FX]] and simple [[equity derivative|equity derivatives]] have a deep, liquid, observable markets, and as there’s little scope for picking a fight, a [[dealer]] {{isdaprov|Calculation Agent}} may not be bothered about ceding rights to dispute its calculations. Expect a different reaction should you seek to second-guess your [[dealer]]’s marks on exotic [[credit derivative|credit derivatives]], on the other hand. These rely enormously on the dealer’s internal models, pricing curves and other kinds of idiosyncratic financial [[bullshit|alchemy]] that are almost certainly unique to the [[dealer]] in question. | ||
====Co-calculation | ====[[Co-calculation agent]]==== | ||
{{cocalculationagent}} | {{cocalculationagent}} | ||
====Other ISDA booklets==== | ====Other ISDA booklets==== | ||
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*In the {{funddefs}} (in virtually identical terms to the {{eqdefs}}) at Section {{funddefprov|1.27}}; | *In the {{funddefs}} (in virtually identical terms to the {{eqdefs}}) at Section {{funddefprov|1.27}}; | ||
*In the {{commoddefs}} at greater length in Section {{commoddefprov|4.5}}; | *In the {{commoddefs}} at greater length in Section {{commoddefprov|4.5}}; | ||
*In the {{creditdefs}} also at greater length Section {{creditdefprov|1.14}}; | *In the {{creditdefs}} also at greater length Section {{creditdefprov|1.14}}; | ||