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Template:Calculation agent versus determination agent: Difference between revisions
Template:Calculation agent versus determination agent (view source)
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Lastly, note that if your investment bank is as left-handedly configured as some the [[JC]] has come across,<ref>AND WHO SHALL REMAIN NAMELESS.</ref> the group entity writing the equity swaps might not be the same as the one doing the physical hedging of those swap obligations (with a back-to-back trade between them, for example), so the Hedging Party/Determining Party might not be either party to the actual {{isdama}} at all. | Lastly, note that if your investment bank is as left-handedly configured as some the [[JC]] has come across,<ref>AND WHO SHALL REMAIN NAMELESS.</ref> the group entity writing the equity swaps might not be the same as the one doing the physical hedging of those swap obligations (with a back-to-back trade between them, for example), so the Hedging Party/Determining Party might not be either party to the actual {{isdama}} at all. | ||
'' | ===The User’s Guide=== | ||
We have noted elsewhere that the User’s Guide is less forthcoming than one might like it to be on what the Determining Party is for, and when there might be two. But it does say this: | |||
{{Quote|“Parties should note that the {{eqderivprov|Determining Party}} is the party that will be calculating its own cost of replacing or providing the economic equivalent of a terminated {{eqderivprov|Transaction}}. The {{eqderivprov|Calculation Agent}} may be a party to the {{eqderivprov|Transaction}}, but when performing its duties as {{eqderivprov|Calculation Agent}} it is acting as a neutral party. The {{eqderivprov|Calculation Agent}} ''as such'' will not have a replacement cost or economic equivalent and therefore should not be designated as the {{eqderivprov|Determining Party}}.<ref>Emphasis added.</ref>}} | |||
If this is meant to help, it singularly fails to, except to recognise that the {{eqderivprov|Determining Party}} is acting ''in its capacity as a {{eqderivprov|Hedging Party}}'', and not in its gnomic, wise, dispassionate role as impartial determiner of abstract values. This explains, maybe, why {{icds}} thought it worthwhile to have distinct roles of {{eqderivprov|Calculation Agent}} and {{eqderivprov|Determining Party}} — it is not saying (as far as we can tell) that the party who is {{eqderivprov|Calculation Agent}} cannot ''be'' {{eqderivprov|Determining Party}} at all, but only that when it ''is'' being a {{eqderivprov|Determining Party}} it is ''not'' being {{eqderivprov|Calculation Agent}}: the two roles wear different trousers, so to speak. | |||
'''When''': The {{eqderivprov|Determining Party}} only ever has to determine a {{eqderivprov|Cancellation Amount}}, {{eqderivprov|Cancellation and Payment}} or {{eqderivprov|Partial Cancellation and Payment}} under {{eqderivprov|12.8}}, and that will only happen in only when a Transaction terminates following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}. | '''When''': The {{eqderivprov|Determining Party}} only ever has to determine a {{eqderivprov|Cancellation Amount}}, {{eqderivprov|Cancellation and Payment}} or {{eqderivprov|Partial Cancellation and Payment}} under {{eqderivprov|12.8}}, and that will only happen in only when a Transaction terminates following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}. | ||
'''Enter the lawyers''': Nevertheless, this is all the opportunity my brethren in the [[Mediocre lawyer|legal profession]] need to confect, and spray-hose all over your confirmation, language like ''“determination or calculation, [[as the case may be]], made (respectively) by the {{eqderivprov|Calculation Agent}} or {{eqderivprov|Determining Party}}, [[as the case may be]]”''. | '''Enter the lawyers''': Nevertheless, this is all the opportunity my brethren in the [[Mediocre lawyer|legal profession]] need to confect, and spray-hose all over your confirmation, language like ''“determination or calculation, [[as the case may be]], made (respectively) by the {{eqderivprov|Calculation Agent}} or {{eqderivprov|Determining Party}}, [[as the case may be]]”''. | ||