Template:Eta vs close-out amount: Difference between revisions
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===On the difference between an “{{isdaprov|Early Termination Amount}}” and a “{{isdaprov|Close-out Amount}}”=== | ===On the difference between an “{{isdaprov|Early Termination Amount}}” and a “{{isdaprov|Close-out Amount}}”=== | ||
The {{1992ma}} features ''neither'' an {{isdaprov|Early Termination Amount}} ''or'' a {{isdaprov|Close-out Amount}}, which many would see as a regrettable oversight. The {{2002ma}} has both, which looks like rather an indulgence, until you realise that they do different things.<ref>This is not to say it isn’t hugely over-engineered, all the same: regular readers will know that the [[JC]] would ''never'' not say that about the output of {{icds}}.</ref> | The {{1992ma}} features ''neither'' an {{isdaprov|Early Termination Amount}} ''or'' a {{isdaprov|Close-out Amount}}, which many would see as a regrettable oversight. The {{2002ma}} has both, which looks like rather an indulgence, until you realise that they do different things.<ref>This is not to say it isn’t hugely over-engineered, all the same: regular readers will know that the [[JC]] would ''never'' not say that about the output of {{icds}}.</ref> | ||
A {{isdaprov|Close-out Amount}} is the termination value for a single {{isdaprov|Transaction}}, or a related group of {{isdaprov|Transaction}}s that a | A {{isdaprov|Close-out Amount}} is the termination value for a single {{isdaprov|Transaction}}, or a related group of {{isdaprov|Transaction}}s that a {{isdaprov|Non-Defaulting Party}} or {{isdaprov|Non-Affected Party}} calculates ''while'' closing out an {{2002ma}}, but it is ''not'' the final, overall sum due under the {{isdama}} itself. Each of the determined {{isdaprov|Close-out Amount}}s summed with the various {{isdaprov|Unpaid Amount}}s to arrive at the {{isdaprov|Early Termination Amount}}, which is the total net sum due under the {{isdama}} at the conclusion of the close-out process. (See Section {{isdaprov|6(e)(i)}} for more on that). | ||
Revision as of 14:12, 17 June 2020
On the difference between an “Early Termination Amount” and a “Close-out Amount”
The 1992 ISDA features neither an Early Termination Amount or a Close-out Amount, which many would see as a regrettable oversight. The 2002 ISDA has both, which looks like rather an indulgence, until you realise that they do different things.[1]
A Close-out Amount is the termination value for a single Transaction, or a related group of Transactions that a Non-Defaulting Party or Non-Affected Party calculates while closing out an 2002 ISDA, but it is not the final, overall sum due under the ISDA Master Agreement itself. Each of the determined Close-out Amounts summed with the various Unpaid Amounts to arrive at the Early Termination Amount, which is the total net sum due under the ISDA Master Agreement at the conclusion of the close-out process. (See Section 6(e)(i) for more on that).
- ↑ This is not to say it isn’t hugely over-engineered, all the same: regular readers will know that the JC would never not say that about the output of ISDA’s crack drafting squad™.