Template:CSA Transfer Description: Difference between revisions

*'''Demand Date''': On any date, be it a {{{{{1}}}prov|Local Business Day}} or not, (call it a “'''Demand Date'''”, but note per {{{{{1}}}prov|2(a)}} or {{{{{1}}}prov|2(b)}} it must be made “on or promptly following a {{{{{1}}}prov|Valuation Date}}”), a party may demand a {{{{{1}}}prov|Transfer}} under para {{{{{1}}}prov|2(a)}} (for a {{{{{1}}}prov|Delivery Amount}}) or {{{{{1}}}prov|2(b)}} (for a {{{{{1}}}prov|Return Amount}}).  

*'''{{{{{1}}}prov|Valuation Time}} - {{{{{1}}}prov|Exposure}}''': The point at which the valuation is made is the {{{{{1}}}prov|Valuation Time}}. This keys off the {{{{{1}}}prov|Valuation Date}}:

:*under the {{csa}} the parties specify either [[close of business]] on the {{csaprov|Valuation Date}} or the {{csaprov|Local Business Day}} immediately ''before'' the {{csaprov|Valuation Date}}), and therefore not necessarily the Demand Date.

:*under the {{vmcsa}} the {{vmcsaprov|Valuation Agent}} has a bit of flexibility to determine the {{vmcsaprov|Valuation Time}} as at the point it closes its book each day.

*'''{{{{{1}}}prov|Valuation Time}} - {{{{{1}}}prov|Eligible Credit Support}}''': Per para {{{{{1}}}prov|2(a)}} the Transferor will transfer {{{{{1}}}prov|Eligible Credit Support}} having a {{{{{1}}}prov|Value}} equal to the {{{{{1}}}prov|Delivery Amount}} ''as of the date of transfer''. Under the {{{{{1}}}prov|Calculations}} provision all calculations of {{{{{1}}}prov|Value}} happen at the relevant {{{{{1}}}prov|Valuation Time}}. Fluctuations in value in the credit support actually delivered  after that time won't invalidate the transfer amount, but they may mean a party can immediately call for more {{{{{1}}}prov|Credit Support}} (that is have another Demand Date).

*'''{{{{{1}}}prov|Transfer Date}}''': Under para {{{{{1}}}prov|3(a)}} ({{{{{1}}}prov|Transfers}}) if the demand is received ''before'' the {{{{{1}}}prov|Notification Time}} (by default, 1pm London time ({{csa}}/12:00 noon London Time ({{vmcsa}}) on a {{{{{1}}}prov|Local Business Day}}) on that Demand Date, the transfer will be made not later than close of business on the related {{csaprov|Settlement Day}} (under the {{csa}}) or [[Regular Settlement Day - VM CSA Provision|''Regular'' Settlement Day]] (under the {{vmcsa}}. If received ''after'' the {{{{{1}}}prov|Notification Time}}, or at any time on a Demand Date that isn’t a {{{{{1}}}prov|Local Business Day}}), the transfer must be made by close of business on the {{csaprov|Settlement Day}}/{{vmcsaprov|Regular Settlement Day}} relating to the day (note: ''ordinary'' day, ''not'' {{{{{1}}}prov|Local Business Day}}) after the Demand Date.

*'''{{csaprov|Settlement Day}}''': Here is where things differ masterially between the {{csa}}and the {{vmcsa}}.

:'''{{csa}}''': The {{csaprov|Settlement Day}} for ''any'' day (whether or not it is a {{{{{1}}}prov|Local Business Day}}) is:

::*'''Cash''': for cash, the next {{{{{1}}}prov|Local Business Day}} and,  

::*'''Securities''': for securities, the {{{{{1}}}prov|Local Business Day}} after the date on which a trade in the relevant security, if effected on the day in question, would have been settled in accordance with customary practice.

:'''{{vmcsa}}''': In the new world we have the new concept of the [[Regular Settlement Day - VM CSA Provision|''Regular'' Settlement Day]], and this is the same {{vmcsaprov|Local Business Day}} as the Demand Date. The run-off text at the end of Paragraph {{vmcsaprov|3(a)}} gives you a lkttle more flex: if the demand came after the {{vmcsaprov|Notification Time}}, then it must make the transfer by close on the {{vmcsaprov|Regular Settlement Day}} for the next day.<ref>Just how the business days interact under the ISDA and CSA is about as complicated as string theory, by the way. For a cheat’s guide, see [[How business days work under the CSA]]. You’re welcome!</ref>