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Template:M gen Equity Derivatives Calculation Agent, Determining Party and Hedging Party: Difference between revisions
Template:M gen Equity Derivatives Calculation Agent, Determining Party and Hedging Party (view source)
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===“Good faith and commercial reasonableness” standard=== | ===“Good faith and commercial reasonableness” standard=== | ||
At first blush it looks like only the {{eqderivprov|Calculation Agent}} is subject to the “{{gfcrm}}” standard, but this is really just the way {{icds}} decided to express themselves. Whereas the performance standard is baked into the definition of Calculation Agent in Section 1.40, for determining Party it is set out separately in Section {{eqderivprov|12.8(b)}}: “Any {{eqderivprov|Cancellation Amount}} will be determined by the {{eqderivprov|Determining Party}} (or its [[agent]]), which will act in [[good faith]] and use [[commercially reasonable]] procedures in order to produce a [[commercially reasonable]] result.” | At first blush it looks like only the {{eqderivprov|Calculation Agent}} is subject to the “{{gfcrm}}” standard, but this is really just the way {{icds}} decided to express themselves. Whereas the performance standard is baked into the definition of Calculation Agent in Section {{eqderivprov|1.40}}, for determining Party it is set out separately in Section {{eqderivprov|12.8(b)}}, and {{eqderivprov|12.8(e)}} and {{eqderivprov|12.8(g)}}: “Any {{eqderivprov|Cancellation Amount}} will be determined by the {{eqderivprov|Determining Party}} (or its [[agent]]), which will act in [[good faith]] and use [[commercially reasonable]] procedures in order to produce a [[commercially reasonable]] result.” | ||
Likewise for the Hedging Party, which Section {{eqderivprov|12.9(a)(v)}} requires to have made commercially reasonable efforts to hedge before declaring there has been a {{eqderivprov|Hedging Disruption}}, as does Section {{eqderivprov|12.9(a)(vii)}} for {{eqderivprov|Loss of Stock Borrow}} and Section {{eqderivprov|12.9(a)(xi)}} when sourcing a {{eqderivprov|Lending Party}}. | |||