Template:M summ Credit Derivatives 4.2

Differences with Section 5(a)(vii):

• Doesn’t cover Credit Support Providers or Specified Entities (being a specific type of credit mitigant to a private OTC bilateral trading agreement, like an ISDA Master Agreement which, being a private contract is not naturally the kind of thing that triggers credit derivatives) nor guarantors (except where the Reference Entity is itself the guarantor). A CDS being, per the Potts opinion, a derivative of the credit risk of a specific entity in which the Buyer has no necessary “insurable interest”, rather than a specific cover for the repayment of a specific debt obligation, the credit worthiness of guarantors, credit support providers and so on doesn’t come into it.
• Simplified provision (d) which is less bothered about who institutes the proceedings, and less particular about the types of formal insolvency process one can go through, so is a bit more “fair large and liberal”.
• No catch-all “or takes any steps in furtherance of the above” rider at the end to sweep up a loss of nerve or weirdo jurisdictions.