Template:20 days notice ISDA: Difference between revisions

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-===“by [[6(a) - ISDA Provision|not more than 20 days’ notice]]”===
+====“by not more than 20 days’ notice”====
 What is the significance of the ''maximum'' [[Notice - ISDA Provision|notice period]] of '''20 days''' that one may use to close out the {{isdama}}? Poor defaulted Counterparty is in pieces, on its knees, bleeding out, but really, as long as it gets ''some'' notice, does it really care how much? Surely, the longer the period, the more hope you have? While the agreement remains ''in'' termination but ''un''-terminated, ''en route'' to that crater in the ground ''but not there yet'' — the chance remains, however remote, that things will come right; that ''you'', its counterparty, will see sense, or unexpectedly discover the one compassionate bone in your body that, until now, has gone wholly unnoticed and, in a cloying bout of clemency, will change your mind and withdraw your notice of termination? Well, a little [[hedge fund]] can dream, can’t it? So why deprive it, and yourself, of that option?
-====I teach you the [[Children of the Forest]]====
+====I teach you the {{cotw}}====
-Now, this is deep [[ISDA]] lore. It is of the [[First Men]]<ref>I know, I know — ''or'' women, but that spoils the ''Game of Thrones'' reference, you know?</ref> — yea, even the [[Children of the Forest]]. As such — since they didn’t have a written tradition back in 1986 and legends were passed down [[orally]] from father to son<ref>See footnote 1 [[and/or]] get a life.</ref> and much has been lost to vicissitude and contingency — it is not a subject on which there is much commentary: That dreadful [[FT book about derivatives]] sagely notes that, usually, much ''less'' notice is given than 20 days (I mean, you don’t ''say'') but doesn’t give a reason for this curious outer bound, in the same way it doesn’t give a reason for much else in the {{isdama}} despite costing a monkey and that being its express purpose. Nor, for that matter, does the official ISDA User’s Guide to the 2002 {{isdama}}.
+Now, this is deep [[ISDA]] lore. It is of the [[First Men]]<ref>I know, I know — ''or'' women, but that spoils the ''Game of Thrones'' reference, you know?</ref> — yea, even the {{cotw}}. As such — since they didn’t have a written tradition back in 1986 and legends were passed down [[orally]] from father to son<ref>See footnote 1 [[and/or]] get a life.</ref> and much has been lost to vicissitude and contingency — it is not a subject on which there is much commentary: That dreadful [[FT book about derivatives]] sagely notes that, usually, much ''less'' notice is given than 20 days (I mean, you don’t ''say'') but doesn’t give a reason for this curious outer bound, in the same way it doesn’t give a reason for much else in the {{isdama}} despite costing a monkey and that being its express purpose. Nor, for that matter, does the official ISDA User’s Guide to the 2002 {{isdama}}.
 One is just expected to ''know''. Yet, in point of fact, no-one seems to.  And no-one wants to risk looking stupid by asking, right? Well, companions, just ''not knowing'' is not how we contrarians roll. We ''like'' looking stupid. Compared with plain old ignorance, it speaks to having at least put in some ''effort'', even if wasted: noble but futile toil is flattering in some lights. So, in the absence of a credentialised, plausible reason,<ref>And we have done our due diligence, you know: in coming to this conclusion the [[JC]] has consulted [[Magic circle law firm]] partners, [[managing director]]s, [[In-house lawyer|inhouse]] [[GC]]s and even a former [[general counsel]] of ISDA, all of whom swore me to secrecy but were as nonplussed as, let’s face it, ''you'' are about this baffling clause.</ref> let us ''speculate''.
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 '''This is very important'''. This means<ref>Arguably unless you’re on a {{1992ma}} and using {{isda92prov|Market Quotation}} — see the footnote above.</ref> you don’t have to liquidate a portfolio in its entirety within 20 days, or even take the values as of that {{{{{1}}}|Early Termination Date}}. If you can, you should — but it may well not be commercially reasonable — or even possible — to. The [[Lehman]] insolvency took ''months'' to unwind. Note also that [[commercial reasonableness]] is viewed from the Non-Affected Party’s perspective. It is not a licence to do whatever the hell you want — but the court won’t second guess prudent application of your own models.
 ====Therefore no-one has any reason to wait ''any'' days, let alone 20====
 So this leaves the mystery of ''why'' a party designating an {{{{{1}}}|Early Termination Date}}, for any reason, wouldn’t just designate it ''now'' — and for those peculiar types who don’t want to do that, why there should be this arbitrary long-stop of 20 days.