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Calculation Agent: Difference between revisions
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The ISDA Schedule has space to specify who the {{isdaprov|Calculation Agent}} should be but, curiously, gives scant hints as to what such an agent should do: the term isn’t otherwised defined — or even used — in either version of the {{isdama}}. The role comes in to its own under the {{csa}} and the various definitions booklets ISDA has published. The Calculation agent can differ from transaction to transaction, and while guileless negotiation teams may therefore spend a great deal of energy haggling fruitlessly about who should be the {{isdaprov|Calculation Agent}}, and what rights the other poor sap should have to challenge its determinations, in practice it will be the [[dealer]]. | The ISDA Schedule has space to specify who the {{isdaprov|Calculation Agent}} should be but, curiously, gives scant hints as to what such an agent should do: the term isn’t otherwised defined — or even used — in either version of the {{isdama}}. The role comes in to its own under the {{csa}} and the various definitions booklets ISDA has published. The Calculation agent can differ from transaction to transaction, and while guileless negotiation teams may therefore spend a great deal of energy haggling fruitlessly about who should be the {{isdaprov|Calculation Agent}}, and what rights the other poor sap should have to challenge its determinations, in practice it will be the [[dealer]]. | ||
How strongly each feels about its right to ''query'' or dispute'' the Calculation | How strongly each feels about its right to ''query'' or ''dispute'' the {{isdaprov|Calculation Agent}}’s determinations will depend on the sort of products they’re expecting to trade: [[FX]] and simple [[equity derivative|equity derivatives]] have 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 agent]]=== | ===[[Co-calculation agent]]=== | ||