Template:Erisa netting: Difference between revisions

From The Jolly Contrarian
Jump to navigation Jump to search
No edit summary
No edit summary
Line 2: Line 2:
Famously, ERISA plans tend to be set '''not''' to [[Netting|net]], and for the unholiest of reasons, courtesy of the phantasmagorical imagination of the opinions committee of a  [[U.S. law firm]] which prudence counsels it would be wiser not to name<ref>Definitely not Cadwalader, obviously.</ref>, upon whom the whole market relies.
Famously, ERISA plans tend to be set '''not''' to [[Netting|net]], and for the unholiest of reasons, courtesy of the phantasmagorical imagination of the opinions committee of a  [[U.S. law firm]] which prudence counsels it would be wiser not to name<ref>Definitely not Cadwalader, obviously.</ref>, upon whom the whole market relies.


This opinion is predicated on the risk that a court would interpret the {{tag|ERISA}} act as requiring the US [[Bankruptcy Code]] ''as it stood in 1971'' to be applied to the insolvency of an {{tag|ERISA}} plan, rather than as it stands at the time of insolvency. The reason that’s a problem is that the “[[safe harbor]]s” for [[Close out|closing out]] swaps were only put into the [[Bankruptcy Code]] in the 1980s.<ref>Being WHEN SWAPS WERE INVENTED. See [[swap history]].</ref>
This opinion is predicated on the risk that a court would interpret the {{tag|ERISA}} act as applying the US [[Bankruptcy Code]] ''as it stood in 1971'' to the insolvency of an {{tag|ERISA}} plan, rather than ''as it stands at the time of insolvency''. That’s a problem, because the “[[safe harbor]]s” one relies upon for safely [[Close out|closing out]] swaps were only put into the [[Bankruptcy Code]] in the 1980s.<ref>Being WHEN SWAPS WERE INVENTED. See [[swap history]].</ref> So, no netting [[ERISA plan]]s. Just in case.


Let me break that down:
Let me break that down:


*The [[Bankruptcy Code]], today, contains a [[safe harbor]] allowing you to close out an {{isdama}} without fearing for your [[netting]], and has done for thirty odd years.
*The [[Bankruptcy Code]], ''today'', contains a [[safe harbor]] allowing you to close out an {{isdama}} without fearing for your [[netting]], ''and has done for thirty odd years''.
*The [[ERISA]] legislation, today, allows you to rely on available [[safe harbor]]s set out in the [[Bankruptcy Code]].
*The [[ERISA]] legislation, ''today'', allows you to rely on available [[safe harbor]]s in the [[Bankruptcy Code]].
*Since the [[ERISA]] legislation was enacted in 1971, thought, the [[US attorney|''very wisest eagle of the legal eagles'']] thinks this might mean only the [[safe harbor]]s that were there in 1971 count, ''even if they don’t exist today'', and none of the [[safe harbor]]s that have been enacted since, even if they do, because when referring to the [[Bankruptcy Code]], [[ERISA]] doesn’t say “[[as amended from time to time]]”.
*Since [[ERISA]] was enacted in 1971, thought the [[US attorney|''very wisest eagle of the legal eagles'']], this might mean only the [[safe harbor]]s that were there in 1971 count, ''even if they don’t exist today'', and none of the [[safe harbor]]s that have been enacted since, ''even if they still do exist'', because when it refers to the [[Bankruptcy Code]], [[ERISA]] doesn’t say “[[as amended from time to time]]”.


Seriously. That’s it.
Seriously. That’s it.


It is a frankly fantastical fear: Not only is it impossible to be certain, at this remove, exactly what the US [[Bankruptcy Code]] said in 1971, much less how it might have been interpreted in those days, but many of the institutions and concepts it relies onmay since have been abolished or materially changed. Who knows? perhaps some old hippyish [[safe harbor]]s from the 1960s that might apply to swaps. But then again, it’s not that likely — and it is just as harsh to blame US legislators for not enacting [[Safe harbor|safe harbors]] for swaps before the 1980s, since ''there [[Swap history|''weren’t'' any swaps before 1981]]''.
It is a frankly fantastical fear: Not only is it hard to know, at this remove, what the US [[Bankruptcy Code]] ''said'' in 1971, much less how it might have been interpreted in those days, but many of the institutions and concepts it relies on may since have been abolished or materially changed. Who knows? perhaps some old hippyish [[safe harbor]]s from the 1960s that might apply to swaps. But then again, it’s not that likely — and it is just as harsh to blame US legislators for not enacting [[Safe harbor|safe harbors]] for swaps before the 1980s — since ''there [[Swap history|''weren’t'' any swaps before 1981]]''.

Revision as of 13:57, 26 November 2019

ERISA netting

Famously, ERISA plans tend to be set not to net, and for the unholiest of reasons, courtesy of the phantasmagorical imagination of the opinions committee of a U.S. law firm which prudence counsels it would be wiser not to name[1], upon whom the whole market relies.

This opinion is predicated on the risk that a court would interpret the ERISA act as applying the US Bankruptcy Code as it stood in 1971 to the insolvency of an ERISA plan, rather than as it stands at the time of insolvency. That’s a problem, because the “safe harbors” one relies upon for safely closing out swaps were only put into the Bankruptcy Code in the 1980s.[2] So, no netting ERISA plans. Just in case.

Let me break that down:

Seriously. That’s it.

It is a frankly fantastical fear: Not only is it hard to know, at this remove, what the US Bankruptcy Code said in 1971, much less how it might have been interpreted in those days, but many of the institutions and concepts it relies on may since have been abolished or materially changed. Who knows? perhaps some old hippyish safe harbors from the 1960s that might apply to swaps. But then again, it’s not that likely — and it is just as harsh to blame US legislators for not enacting safe harbors for swaps before the 1980s — since there weren’t any swaps before 1981.

  1. ↑ Definitely not Cadwalader, obviously.
  2. ↑ Being WHEN SWAPS WERE INVENTED. See swap history.
Retrieved from "https://jollycontrarian.com/index.php?title=Template:Erisa_netting&oldid=34771"