Talk:Settlement Disruption - Emissions Annex Provision: Difference between revisions

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(d)(i)(4) Settlement Disruption Event
(D) Continuing Settlement Disruption Event: Where a Settlement Disruption Event continues:
 
(I) for 9 Delivery Business Days after the originally scheduled Delivery Date; or, if shorter:
(A) Notification of Settlement Disruption Event: Upon the occurrence of a Settlement Disruption Event, either party may notify the other party in writing of the commencement of the Settlement Disruption Event and the EU Emissions Allowance Transaction(s) affected by that Settlement Disruption Event. Where the notification is from the party affected by the Settlement Disruption Event, to the extent available to such party, it shall also provide details of the Settlement Disruption Event and a non-binding estimate of the extent and the expected duration of its inability to perform its obligations due to the Settlement Disruption Event.
(II) until a Reconciliation Deadline falling on or after the original Delivery Date; or, if shorter:
(B) Effect of Settlement Disruption Event: If a Settlement Disruption Event occurs, the obligations of both parties which would otherwise be required to be performed with respect to the EU Emissions Allowance Transaction(s) affected by the Settlement Disruption Event will be suspended for the duration of the Settlement Disruption Event and, subject to (d)(i)(4)(D) (Continuing Settlement Disruption Event) below, will not be required to be performed until the Settlement Disruption Event is overcome or ceases to exist. During the continuation of the Settlement Disruption Event, the party affected by the Settlement Disruption Event shall continue to use all reasonable endeavours to overcome the Settlement Disruption Event.
(III) until the day 3 Delivery Business Days before the End of Phase Reconciliation Deadline falling on or after the original Delivery Date:
(C) Settlement Disruption Event Delayed Performance: Subject to Part (d)(i)(4)(D)(Continuing Settlement Disruption Event) below, upon the Settlement Disruption Event being overcome or ceasing to subsist, both parties will be required, as soon as reasonably practicable but not later than the second Delivery Business Day following the date upon which the Settlement Disruption Event has been overcome or ceases to exist, to resume full performance of their obligations under this Agreement in respect of the relevant EU Emissions Allowance Transaction(s) (including, for the avoidance of doubt, any suspended obligations).
then at that time there will be an Illegality where the affected Transaction is the sole Affected Transaction, both parties are Affected Parties, there is no Waiting Period and, if an Early Termination Date results, when determining the Early Termination Amount the suspended obligations will resume on the Early Termination Date, if “Payment on Termination for Settlement Disruption” applies, and if it does not the parties will have no further obligations after the Settlement Disruption Event other than for Unpaid Amounts and provided that (other than in respect of already-delivered Allowances)
(D) Continuing Settlement Disruption Event: In respect of an EU Emissions Allowance Transaction affected by a Settlement Disruption Event, where the Settlement Disruption Event continues:
(i) Delivering Party must promptly refund any amount Receiving Party it was paid under a Allowance Forward Transaction or Call; and
(I) during the period ending 9 Delivery Business Days after the original date that, but for the Settlement Disruption Event, would have been the Delivery Date for an EU Emissions Allowance Transaction; or
(ii) Receiving Party must promptly refund any amount Delivering Party it was paid under a Put
(II) if such 9 Delivery Business Day period would end after the Reconciliation Deadline on or immediately following the original date that, but for the Settlement Disruption Event, would have been the Delivery Date for an EU Emissions Allowance Transaction, during the period ending on that Reconciliation Deadline; or
together with interest from the payment date until the termination date of the Transaction at the overnight deposit rate for the relevant currency.
(III) if such 9 Delivery Business Day period would end after the day that is 3 Delivery Business Days preceding the End of Phase Reconciliation Deadline on or immediately following the original date that, but for the Settlement Disruption Event, would have been the Delivery Date for an EU Emissions Allowance Transaction, during the period ending on the day that is 3 Delivery Business Days preceding that End of Phase Reconciliation Deadline,
then on that 9th Delivery Business Day, Reconciliation Deadline or day that is 3 Delivery Business Days preceding the End of Phase Reconciliation Deadline (as the case may be), an [Additional Termination Event][Illegality][1] shall be deemed to have occurred in respect of which the relevant EU Emissions Allowance Transaction is the sole Affected Transaction, both parties are Affected Parties[, no Waiting Period will apply] and, if an Early Termination Date results from that Termination Event, then, for purposes of determining any amount payable under Section 6(e) in respect of that Early Termination Date:
(i) if “Payment on Termination for Settlement Disruption” is specified to be applicable in the Annex to this Part 5 or the Confirmation for the relevant EU Emissions Allowance Transaction, it will be deemed that the requirement to perform the suspended obligations resumed on the Early Termination Date; or
(ii) if “Payment on Termination for Settlement Disruption” is specified to be inapplicable in the Annex to this Part or the Confirmation for the relevant EU Emissions Allowance Transaction, it will be deemed that the parties had no further delivery or payment obligations in respect of the EU Emissions Allowance Transaction after the occurrence of the Settlement Disruption Event (other than in respect of any payment due by one party in connection with delivery obligations already performed by the other party); provided, however, that
(i) Delivering Party shall promptly refund to Receiving Party any amount that may have been paid by Receiving Party in respect of the EU Emissions Allowance Transaction that is an Allowance Forward Transaction or a Call and
(ii) Receiving Party shall promptly refund to Delivering Party any amount that may have been paid by Delivering Party in respect of an EU Emissions Allowance Transaction that is a Put (in each case, other than in respect of delivered Allowances) together with interest on that amount in the same currency as that amount for the period from (and including) the date that amount was paid to (but excluding) the date of termination of such EU Emissions Allowance Transaction, at the rate certified by the party required to refund the amount to be a rate offered to such party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by that party for purposes of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in the relevant market.

Latest revision as of 14:08, 4 May 2023

(D) Continuing Settlement Disruption Event: Where a Settlement Disruption Event continues: (I) for 9 Delivery Business Days after the originally scheduled Delivery Date; or, if shorter: (II) until a Reconciliation Deadline falling on or after the original Delivery Date; or, if shorter: (III) until the day 3 Delivery Business Days before the End of Phase Reconciliation Deadline falling on or after the original Delivery Date: then at that time there will be an Illegality where the affected Transaction is the sole Affected Transaction, both parties are Affected Parties, there is no Waiting Period and, if an Early Termination Date results, when determining the Early Termination Amount the suspended obligations will resume on the Early Termination Date, if “Payment on Termination for Settlement Disruption” applies, and if it does not the parties will have no further obligations after the Settlement Disruption Event other than for Unpaid Amounts and provided that (other than in respect of already-delivered Allowances) (i) Delivering Party must promptly refund any amount Receiving Party it was paid under a Allowance Forward Transaction or Call; and (ii) Receiving Party must promptly refund any amount Delivering Party it was paid under a Put together with interest from the payment date until the termination date of the Transaction at the overnight deposit rate for the relevant currency.

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