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Template:Calculation agent versus determination agent (view source)

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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 {{eqderivprov|Transaction}} terminates following an {{eqderivprov|Extraordinary Event}} or an {{eqderivprov|Additional Disruption Event}}.
==={{eqderivprov|Calculation Agent}} vs. {{eqderivprov|Determining Party}}===
==={{eqderivprov|Calculation Agent}} vs. {{eqderivprov|Determining Party}}===
'''Why''': The {{eqderiv}} recognise that while most calculations could be performed by whoever is appointed {{eqderivprov|Calculation Agent}}, determination of a {{eqderivprov|Cancellation Amount}} is inextricably related to the [[hedge]] and — especially where there is a [[Market Disruption Event - Equity Derivatives Provision|disrupted market]] – this is best to be calculated by the one whose problem it is to unwind that hedge: namely, the {{eqderivprov|Hedging Party}}.  
'''Why''': The {{eqderiv}} recognise that while most calculations could be performed by whoever is appointed {{eqderivprov|Calculation Agent}}, determination of a {{eqderivprov|Cancellation Amount}} is inextricably related to the [[hedge]] and — especially where there is a [[Market Disruption Event - Equity Derivatives Provision|disrupted market]] – this is best to be calculated by the one whose problem it is to unwind that hedge: namely, the {{eqderivprov|Hedging Party}}.  
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===The User’s Guide===
===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:
We have noted [[12.7(c) - Equity Derivatives Provision|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 (or why) there might ever 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>}}
{{quote|“{{cancellation amount UG}}”}}


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.  
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}}.
But what it ''does'' confirm is that the {{eqderivprov|Determining Party}} is meant to refer to the person who is actually hedging the trade, and that what they will be doing is liquidating hedges to get prices.
 
'''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]]”''.
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