Template:M summ 1995 CSA Independent Amount: Difference between revisions

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 But the {{csa}} doesn’t have a concept of “[[initial margin]]”, and no-one in their right mind would send their swap dealer a wodge of money just to commemorate the signing of an {{isdama}}, exciting though that event may be. Perhaps {{icds}} of 1994 and 1995 lived in a kinder, more naïve time — one more impressionably swooned by the conclusion of a negotiation than our own — or maybe they were just blitzed when they came up with the idea.<ref>This isn’t an entirely outlandish speculation: how else can you rationalise their formulation of {{isdaprov|Indemnifiable Taxes}}, for example? It was the “naughty nineties”, after all.</ref>
-In any case, what the market has done since the [[Children of the Forest]] first produced that nutty {{isdaprov|Independent Amount}} concept is to bend the squad’s fantastical verbal engineering so it ''works like'' {{isdaprov|Transaction}}-specific [[initial margin]]. So, the {{isdaprov|Independent Amount}} will be usually defined as “an amount agreed between the parties in relation to each {{isdaprov|Transaction}}, or as otherwise advised by Party A”,<ref>Being the dealer, of course.</ref> which rather kicks the issue in to touch. In practice, it’s likely to be articulated as a multiplier on notional, will be required of the client by the [[swap dealer]] and not the other way around, will be payable at the start of each {{isdaprov|Transaction}}, and may be adjustable on the fly.
+In any case, what the market has done since the [[Children of the Forest]] first produced that nutty {{csaprov|Independent Amount}} concept is to bend the squad’s fantastical verbal engineering so it ''works like'' {{isdaprov|Transaction}}-specific [[initial margin]]. So, the {{csaprov|Independent Amount}} will be usually defined as “an amount agreed between the parties in relation to each {{isdaprov|Transaction}}, or as otherwise advised by Party A”,<ref>Being the dealer, of course.</ref> which rather kicks the issue in to touch. In practice, it’s likely to be articulated as a multiplier on notional, will be required of the client by the [[swap dealer]] and not the other way around, will be payable at the start of each {{isdaprov|Transaction}}, and may be adjustable on the fly.
 For example, a [[dealer]] who sets [[IA]] by reference to the perceived volatility of the {{isdaprov|Transaction}} might reserve the right to increase [[IA]] should that volatility unexpectedly change. You can be sure more than one risk officer embarked on an undignified scramble for {{sex|her}} margin tables — and put in a desperate call to [[Legal]] — the day UK decided [[Brexit means Brexit|Brexit meant what it said]] and [[sterling]] [[gapped]] down 8%.
-Particularly where underlying trades and markets are volatile, expect to see much customisation of the {{isdaprov|Independent Amount}}.
+Particularly where underlying trades and markets are volatile, expect to see much customisation of the {{csaprov|Independent Amount}}.
 *It might be calculated by reference to a given multiplier for a given asset class: it is not uncommon to see tiering in FX transactions, for example, where {{isdaprov|Transaction}}s on currencies in the highest tier might have a bigger multiplier that those on lower tiers.
 *Especially where one counterparty is providing access to markets for the other party (so called [[synthetic prime brokerage]]) there may be a provision that the {{ca}} can adjust tiers, multipliers, and the assets which are eligible for each tier in its discretion, and with effect to existing as well as new transactions. This can have the effect of retroactively adjusting {{csaprov|Independent Amount}}s, in which case the difference can be called under the {{csa}}’s ordinary {{csaprov|Transfer}} provisions.