Template:M summ 1995 CSA Local Business Day

The keen will have noticed that “Local Business Day” under an English law CSA is defined quite separately from “Local Business Day” as it is defined under the ISDA Master Agreement itself, whereas a Local Business Day under a New York law CSA, while separately defining the term, only goes on to defer to the original definition of LBD in the ISDA Master Agreement, pausing only to clarify that references to “payment” in the ISDA Master Agreement definiton are deemed to include Transfers under the CSA.

Why ISDA’s British crack drafting squad™ couldn’t have done this too, we can only wonder.

How the business days work for demands under a Credit Support Annex

1. Valuation and demand: A Transferee may demand a Delivery Amount (Para 2(a)) or a Return Amount Para 2(b)) “on or promptly following a Valuation Date”.
2. Valuation Date: A “Valuation Date” means a day on which banks are open in at least one Valuation Date Location for each party.
   1. Each party can specify however many Valuation Date Locations it likes.
   2. Tip: the fewer you specifiy, the greater the chance none will be open on a given day, and you will be excused from a margin call, so don’t overdo it. One should be ample.
3. Settlement: Any Delivery Amount or Return Amount must be settled (Para 3(a)) by the close of business on the Regular Settlement Day relating to the date such demand is received (if received before the Notification Time (spoiler: usually 11 am, noon or 1pm)), or the Regular Settlement Day relating to the day after the date such demand is received (if received after the Notification Time).
4. Regular Settlement Day: A “Regular Settlement Day” means the same Local Business Day — careful: as defined in the 1995 CSA, not the ISDA Master Agreement — on which the demand is made.
5. Local Business Day: A “Local Business Day” (under the 1995 CSA) means, in the case of notices, a day on which banks are open in the address for the notice most recently specified by the Recipient. What if demand is made on a day that is not a Local Business Day? Simple: by dint of Section 12 of the ISDA Master Agreement, the notice will be deemed given on the next Local Business Day (as defined in the ISDA Master Agreement, not the 1995 CSA).

Easy.