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Template:Calculation agent dispute: Difference between revisions
Template:Calculation agent dispute (view source)
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*Thirdly, because we delta-one]] hedge, we come up with our {{eqderivprov|Determination Agent}} “determination” by actually selling the right number of shares. It isn’t like we confect some hypothetical valuation based on a model some geek in correlation trading built in [[excel]]. We don't go ask some stooge dealers for a soft estimate, and promise them champagne in the mail. We ''actually sell the stock''. Our own money out the door. We can't get it back. What you are asking is to second guess that actual transaction by ''you'' being able to appoint some stooge dealer for a soft estimate. | *Thirdly, because we delta-one]] hedge, we come up with our {{eqderivprov|Determination Agent}} “determination” by actually selling the right number of shares. It isn’t like we confect some hypothetical valuation based on a model some geek in correlation trading built in [[excel]]. We don't go ask some stooge dealers for a soft estimate, and promise them champagne in the mail. We ''actually sell the stock''. Our own money out the door. We can't get it back. What you are asking is to second guess that actual transaction by ''you'' being able to appoint some stooge dealer for a soft estimate. | ||
*Fourthly, there are a ton of controls on us already, contractual, regulatory and economic: | *Fourthly, there are a ton of controls on us already, contractual, regulatory and economic: | ||
**'''Contractual''': | **'''Contractual''': Section {{eqderivprov|12.8}} of the {{eqderiv}} (especially Sections {{eqderivprov|12.8(b)}} and {{eqderivprov|12.8(g)}}) is shot through with requirements to act in a [[commercially reasonable manner]], using {{eqderivprov|commercially reasonable procedures}}, going out to leading dealers and so on. Likewise, a whenever a {{eqderivprov|Calculation Agent}} is acts or exercises judgment in any way, it must do so in [[good faith]] and in a [[commercially reasonable manner]] (See Section {{eqderivprov|1.40}}). What the dispute provision is aimed to do, your adversary will say, is provide a stick to ''enforce'' that obligation. | ||
**'''Regulatory''': There's the best execution obligation. The COBS rules require us to treat our clients fairly. | **'''Regulatory''': There's the best execution obligation. The COBS rules require us to treat our clients fairly. | ||
**'''Economic''': You are the ''[[client]]''. You can pull your business. You can decide to never give us another trade. Seeing as we are [[delta-one]] hedged, we have no incentive at all to lowball, and every incentive to give you the best price we can manage. | **'''Economic''': You are the ''[[client]]''. You can pull your business. You can decide to never give us another trade. Seeing as we are [[delta-one]] hedged, we have no incentive at all to lowball, and every incentive to give you the best price we can manage. | ||