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| [[5(a)(iii) - ISDA Provision|Before]] you even put your hand up: no, a [[Credit Support Annex]] between the two counterparties is ''not'' a {{isdaprov|Credit Support Document}}, at least under the English law construct: there it is a “{{isdaprov|Transaction}}” under the {{isdama}}. It is somewhat different with a {{1994csa}}, but even there the Users’ Guide cautions against treating a direct swap counterparty as a “{{isdaprov|Credit Support Provider}}” — the {{isdaprov|Credit Support Provider}} is meant to be a third party: hence references to the party itself defaulting directly under a {{isdaprov|Credit Support Document}}.
| | {{isda 5(a)(iii) summ|isdaprov}} |
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| Therefore, [[tedious]]ly — and we think it was avoiding precisely ''this'' tediosity that the Users’ Guide had in mind, but, best laid plans and all that — there is an ''[[ontological]]'' difference between the mechanics of [[close out]] when it comes to a failure under a {{nycsa}} when compared to non-payment under a {{csa}}. A {{csa}} is a {{isdaprov|Transaction}} under the {{isdama}} and is ''not'' a {{isdaprov|Credit Support Document}}. A failure to meet a [[margin call]] under a that annex or any of its modern English-law successors is therefore a {{isdaprov|Failure to Pay or Deliver}} under Section {{isdaprov|5(a)(i)}} of the actual {{isdama}}; a failure to post under a {{nycsa}} is a Section {{isdaprov|5(a)(iii)}} {{isdaprov|Credit Support Default}}.
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| Does this, in practical point of fact, make any difference at all? It may do, if you have negotiated different grace periods under your CSA than those under your {{isdama}} proper. Before you ask why anyone would ever do that, firstly let us say that ''far'' more moronic things than that happen every day in the negotiation of global markets documentation, and secondly that, for example, grace periods for [[regulatory initial margin]] may well be standardised — and dealers may not have the capacity or appetite to negotiate them tightly, gien the paper war — so you can quite easily see ISDAs with very brief grace periods, and IM CSDs with longer ones.
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