Template:Emissions Failure to Transfer or Accept summ

When your Transaction gets to its end game, there are — absent unforeseen external events beyond the parties’ reasonable control, like Force Majeure, Suspension Events and Illegality — if the Delivering Party, or for that matter, the Receiving Party, just hasn’t come up with the required “goods” by the required time, how do things play out?

Each of the Master Agreements does things its own way, and as you might expect, the respective literature plays like a Myers Briggs assessment of the organisation’s personality.

How the Trading Agreements deal with Failure to Transfer or Accept

Component	ISDA	EFET	IETA
Cure Period to remedy	Yes: Final Delivery Date (2 days hence)	yes, through 2 day grace period	Yes: to Final Delivery Date (2 days hence)
EEP/No EEP alternatives	Yes	Yes	Yes
Replacement Costs	Delivering Party’s Replacement Cost/Receiving Party’s Replacement Cost	Buyer’s Cover Costs/Seller’s Cover Costs	Delivering Party’s Replacement Cost/Receiving Party’s Replacement Costs
No EPP Replacement Cost calculation	Example	Min [0, Price Increase on Failed Allowances + Transaction Costs + Accrued Interest]	Example
EPP Replacement Cost calculation	Example	Example	Example
Interest accrual basis	Example	Confusing. There are different accrual rates for the grace period and the default period, and interest seems to accrue during the grace period on the whole value of the undelivered Allowances, not just any price differential against the Traded Price.	Example
Example	Example	Example	Example
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