Template:Cancellation amount UG: Difference between revisions

{{Quote|“In calculating a {{eqderivprov|Cancellation Amount}}, a {{eqderivprov|Determining Party}} is required to act [[in good faith]] and to use [[commercially reasonable]] procedures. It should be noted that [[Quotes|quotations]] are not necessarily required, as depending on the {{eqderivprov|Transaction}} in question, the cost of liquidating [[hedge]]s may be a more appropriate basis for determining a {{eqderivprov|Cancellation Amount}} than soliciting quotations.<ref>“''May'' be”. You think?</ref>

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>}}