Template:Calculation agent versus determination agent
The difference between the Calculation Agent and the Determining Party
The Equity Derivatives recognise that while most calculations could be performed by whoever is appointed Calculation Agent, determination of a Cancellation Amount is inextricably related to the hedge usually where there is a disrupted market – and this is best to be calculated by the person whose problem it is unwinding that hedge: the Hedging Party in theory (though rarely in practice[1]) the Hedging Party might not be the Calculation Agent.
You might think the name of the game should be to avoid language like “determination or calculation, as the case may be, made (respectively) by the Calculation Agent or Determining Party, as the case may be” throughout your confirmation, since that helps no one except my brethren in the legal profession.
The Determining Party thus only comes into play to determine a Cancellation Amount, Cancellation and Payment or Partial Cancellation and Payment under 12.8. This will generally happen in only when a Transaction terminates following an Extraordinary Event or an Additional Disruption Event.
- ↑ If Calculation Agent == Dealer, and Dealer == Hedging Party, and Hedging Party == Determining Party, then Calculation Agent == Determining Party.