Specified Entity - ISDA Provision

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ISDA Anatomy

incorporating our exclusive ISDA in a NutshellTM

In a NutshellTM Section Specified Entity:

Specified Entity” is defined in the Schedule.
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2002 ISDA full text of Section Specified Entity:

Specified Entity” has the meaning specified in the Schedule.
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Click here for the text of Section Specified Entity in the 1992 ISDA

Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project
Navigation Preamble | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14
Events of Default: 5(a)(i) Failure to Pay or Deliver5(a)(ii) Breach of Agreement5(a)(iii) Credit Support Default5(a)(iv) Misrepresentation5(a)(v) Default Under Specified Transaction5(a)(vi) Cross Default5(a)(vii) Bankruptcy5(a)(viii) Merger without Assumption
Termination Events: 5(b)(i) Illegality5(b)(ii) Force Majeure Event5(b)(iii) Tax Event5(b)(iv) Tax Event Upon Merger5(b)(v) Credit Event Upon Merger5(b)(vi) Additional Termination Event

Index — Click ᐅ to expand:
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Note the reference in relation to (a) Section 5(a) Termination Events (like DUST for example), and (b) the "Absence of Litigation" representation in Section 3(c) of the 2002 ISDA.

A Specified Enity is any affiliate (or, in theory at any rate, even a non-affiliate) of a counterparty to an ISDA Master Agreement which is designated in the relevant Schedule.

It is relevant to the definition of Cross Default and Default under Specified Transaction in that it widens the effect of those provisions to include defaults by the parties specified.

Trick for young players: nominating Specified Entities for yourself has its upsides

Specified Entity widens the scope of those provisions also to include defaults by Specified Entities under contracts with your Specified Entities - so there *is* some benefit to naming your affiliates, friends and relations as Specified Entities. But given how unlikely you are to be actually monitoring how a counterparty performs with an affiliate, it's more of a false comfort than a real one.

See also