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| {{{{{1}}}|Specified Entity}} is so (~ cough ~) important that it is literally the first thing you see when you regard an ISDA {{{{{1}}}|Schedule}}. | | A {{{{{1}}}|Specified Entity}} is any affiliate of a counterparty to an {{isdama}} which is designated in the relevant Schedule. |
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| Painstakingly set out, separately for {{{{{1}}}|Events of Default}} (namely {{{{{1}}}|DUST}} (Section {{{{{1}}}|5(a)(v)}}), {{{{{1}}}|Cross Default}} (Section {{{{{1}}}|5(a)(vi)}}) and {{{{{1}}}|Bankruptcy}} (Section {{{{{1}}}|5(a)(vii)}}) and the one {{{{{1}}}|Termination Event}} (Credit Event Upon Merger (Section {{{{{1}}}|5(b)(v)}} — as if you would want different Affiliates to trigger this event depending on precisely ''how'' they cork-screwed into the side of a hill), and jointly for the “{{{{{1}}}|Absence of Litigation}}” representation in Section {{{{{1}}}|3(c)}} of the {{2002ma}}.
| | It is relevant to the definition of {{{{{1}}}|Cross Default}} and {{{{{1}}}|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified. |
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| A {{{{{1}}}|Specified Entity}} is any affiliate (or, in theory at any rate, even a non-affiliate, if your risk officer is a total cretin) of a counterparty to an {{isdama}} which is designated in the relevant Schedule.
| | It is so (~ cough ~) important that it is, literally, the first thing you see when you regard an ISDA {{{{{1}}}|Schedule}}. |
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| It is relevant to the definition of {{{{{1}}}|Cross Default}} and {{{{{1}}}|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified.
| | The same concept in both versions of the {{isdama}} only with different clause numberings. {{{{{1}}}|Specified Entity}} is relevant to: |
| | *{{{{{1}}}|DUST}} |
| | *{{{{{1}}}|Cross Default}} |
| | *{{{{{1}}}|Bankruptcy}} |
| | *{{{{{1}}}|Credit Event Upon Merger}} |
| | And of course the {{{{{1}}}|Absence of Litigation}} representation. Let’s not forget that. |
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| ===Nominating {{{{{1}}}|Specified Entities}} for yourself under {{isdaprov|DUST}} has its upsides===
| | Each party designates its Specified Entities for each of these events in Part 1(a) of the Schedule, which gives the Schedule its familiar layout: |
| For the most part, allowing any of your friends or relations to be named as your {{{{{1}}}|Specified Entity}} widens the range of vicissitudes of which you may fall foul, and therefore [[inure]]s solely for the benefit of your counterparty. In otherwords, if you can get away with it, don’t agree to name any of your affiliates as {{isdaprov|Specified Entities}}.
| | {{subtableflex|47| |
| | {{ISDA Master Agreement 2002 Schedule Part 1(a)}} }} |
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| There is one exception, and that is Section {{isdaprov|5(a)(v)}} {{isdaprov|Default Under Specified Transaction}}).
| | Now, why would anyone want different Affiliates to trigger this a {{{{{1}}}|Event of Default}} depending precisely upon ''how'' they cork-screwed into the side of a hill? Well, there is one reason where it might make a big difference when it comes to {{{{{1}}}|Bankruptcy}}, and we will pick that up in the premium section. But generally — and even in that case, really — in our time of variation margin it really ought not to be the thing that is bringing down your {{isdama}}. |
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| of those provisions also to include defaults ''by'' the other side (and its {{{{{1}}}|Specified Entities}}) under their contracts with ''your'' {{{{{1}}}|Specified Entities}} — so there ''is'' some benefit to naming ''your'' [[affiliates]], friends and relations as {{{{{1}}}|Specified Entities}}. But given how unlikely you are to be actually monitoring how a counterparty performs with an affiliate, it’s more of a false comfort than a real one.
| | Note it also pops up as relevant in the “{{{{{1}}}|Absence of Litigation}}” representation in Section {{{{{1}}}|3(c)}} of the {{2002ma}}. |