Template:Isda Specified Transaction summ

Used in the {{{{{1}}}|Default under Specified Transaction}} {{{{{1}}}|Event of Default}} under Section {{{{{1}}}|5(a)(v)}} — fondly known to those in the know as “{{{{{1}}}|DUST}}”.

What?

{{{{{1}}}|Specified Transaction}}s are those financial markets transactions between you and your counterparty other than those under the present ISDA Master Agreement, default under which justifies the wronged party closing out the present ISDA. “Specified Transactions” therefore specifically exclude {{{{{1}}}|Transactions}} under the ISDA itself for the sensible reason that a default under those is covered by by {{{{{1}}}|Failure to Pay or Deliver}} and {{{{{1}}}|Breach of Obligation}}. It might lead to a perverse result if misadventure under an ISDA Master Agreement {{{{{1}}}|Transaction}} which did not otherwise amount to an {{{{{1}}}|Event of Default}}, became one purely as a result of the {{{{{1}}}|DUST}} provision, however unlikely that may be.

Credit support annexes?

We are going to go out on a limb here and say that little parenthetical “(including an agreement with respect to any such transaction)” is, if not deliberately designed that way, is at least calculated to capture failures under a credit support annex which, yes, is a {{{{{1}}}|Transaction}} under an ISDA Master Agreement but no, is not really a swap or anything really like one.

There is enough chat about {{{{{1}}}|Credit Support Provider}}s (yes, yes, the counterparty itself is of course not a {{{{{1}}}|Credit Support Provider}}) to make us think, on a fair, large and liberal interpretation, that a default under the CSA to a swap {{{{{1}}}|Transaction}} is meant to be covered.