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{{fullanat2|isda|Specified Transaction Definition|2002|Specified Transaction Definition|1992}} | |||
''See also: [[Failure to Pay, DUST and Cross Default under the ISDA]]''<br> | ''See also: [[Failure to Pay, DUST and Cross Default under the ISDA]]''<br> | ||
Used in the {{isdaprov|Default under Specified Transaction}} {{isdaprov|Event of Default}} under Section {{isdaprov|5(a)(v)}} — fondly known to those in the know as “{{isdaprov|DUST}}”. | |||
===What?=== | |||
{{isdaprov|Specified Transaction}}s are those financial markets transactions between you and your counterparty ''other than those under the present {{isdama}} default under which justifies the wronged party closing out the present {{isda}}. “Specified Transactions” therefore specifically ''exclude'' {{isdaprov|Transactions}} under the ISDA itself for the sensible reason that a default under those is covered by by {{isdaprov|Failure to Pay or Deliver}} and {{isdaprov|Breach of Obligation}}. It might lead to a perverse result if misadventure under an {{isdama}} {{isdaprov|Transaction}} which did not otherwise amount to an {{isdaprov|Event of Default}}, became one purely as a result of the {{isdaprov|DUST}} provision, however unlikely that may be. | |||
===Different formulations between the versions=== | |||
A {{isdaprov|Specified Transaction}} under the {{1992ma}} is, by ISDA standards, monosyllabic to the point of being terse. | |||
{{ | Under the {{2002ma}} it is expressed with far more of ISDA's signature sense of the Byzantine, expanding the basic definition to specifically include [[futures]] [[credit derivatives]], [[repo]], [[stock lending]], [[weather derivative]]<ref>Oh, look! Anyone remember {{tag|Enron}}? Anyone feeling nostalgic for the good old days when men were men, fraud was fraud, financial accountants were profit centres and anything seemed possible?</ref>s, [[NDF]]s, transactions executed under terms of business and other commodities or similar transactions that is presently or in future becomes common in the financial markets. | ||
===Enter the fiddlers=== | |||
This won't stop enthusiastic credit officers amplifying the list. | |||
====An odd cognitive dissonance==== | ====An odd cognitive dissonance==== | ||
Note {{dust}} doesn't generally pick up contracts in the nature of [[borrowed money]] or [[indebtedness]], because these are picked up under the wider scope of the {{isdaprov|Cross Default}} provision which, of course, applies to indebtedness your counterparty owes to anyone, not just to you (though it does cover indebtedness owed to you). Still, there is weirdness: {{isdaprov|Cross Default}} contemplates a {{isdaprov|Threshold Amount}} before it can be triggered. {{isdaprov|DUST}} doesn't. So this leads to an odd gap: | Note {{dust}} doesn't generally pick up contracts in the nature of [[borrowed money]] or [[indebtedness]], because these are picked up under the wider scope of the {{isdaprov|Cross Default}} provision which, of course, applies to indebtedness your counterparty owes to anyone, not just to you (though it does cover indebtedness owed to you). Still, there is weirdness: {{isdaprov|Cross Default}} contemplates a {{isdaprov|Threshold Amount}} before it can be triggered. {{isdaprov|DUST}} doesn't. So this leads to an odd gap: | ||
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{{isdaanatomy}} | {{isdaanatomy}} | ||
*{{isdaprov|Default under Specified Transaction}} | *{{isdaprov|Default under Specified Transaction}} | ||
{{ref}} |