Template:Nutshell 2016 CSA 4(a)
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4(a) Disputed Calculations or Valuations. If a Disputing Party disputes any collateral call (the Value of either the Exposure or the Credit Support being transferred):
- it must give notice by close of business on the date the transfer is due (if a Delivery Amount (VM) or Return Amount (VM)) or, the Local Business Day following the date of transfer (if a transfer of Eligible Credit Support (VM) or Equivalent Credit Support (VM));
- it must transfer any undisputed amount by close of business on the date the transfer is due;
- the parties will try resolve the dispute. If by the Resolution Time they haven’t:
- Disputes as to Exposure: the Valuation Agent will recalculate the disputed portion of the Exposure as of the Recalculation Date by:
- (I) (for a 1992 ISDA-style close out mechanism) averaging mid-market quotations for the Market Quotation from four Reference Market-makers; or (II) (for a 2002 ISDA-style close out mechanism) averaging mid-market quotations from for third parties for the Close-out Amount, in either case from those parties who will provide one (if none will, the Valuation Agent’s original calculations will stand); and
- (calculating the outstanding Credit Support Balance as per Paragraph 11(f)(ii);
- Disputes as to Credit Support Value: recalculating the Value as of the date of transfer.
- Disputes as to Exposure: the Valuation Agent will recalculate the disputed portion of the Exposure as of the Recalculation Date by:
The Valuation Agent will notify each party by the Notification Time on the Local Business Day following the Resolution Time. Then the appropriate transfer has to be made.