Template:Nutshell 2018 CSD 3(c)(iii): Difference between revisions

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{{imcsdprov|3(c)(iii)}} '''{{imcsdprov|Margin Approach}}'''. The parties will agree in Paragraph {{imcsdprov|13}}, one of the following “'''{{imcsdprov|Margin Approach}}es'''” to govern the relationship between “'''{{imcsdprov|Margin Amount (IM)}}'''” and “'''{{imcsdprov|Margin Amount (IA)}}'''”. 
{{imcsdprov|3(c)(iii)}} '''{{imcsdprov|Margin Approach}}'''. Based on the “'''{{imcsdprov|Margin Approach}}'''” specified in Paragraph {{imcsdprov|13}} to govern the relationship between “'''{{imcsdprov|Margin Amount (IM)}}'''” and “'''{{imcsdprov|Margin Amount (IA)}}'''”, a {{imcsdprov|Chargor}}’s “'''{{imcsdprov|Credit Support Amount (IM)}}'''” on any {{imcsdprov|Calculation Date (IM)}} will be:
:(A) “'''{{imcsdprov|Distinct Margin Flow (IM) Approach}}'''”:
{{Nutshell 2018 CSD 3(c)(iii)(A)}}
::(1) “'''{{imcsdprov|Credit Support Amount (IM)}}'''” means, with respect to a party as the {{imcsdprov|Chargor}}, for any {{imcsdprov|Calculation Date (IM)}}, (i) the {{imcsdprov|Margin Amount (IM)}} applicable to the {{imcsdprov|Chargor}}, if any, minus (ii) the {{imcsdprov|Chargor}}’s {{imcsdprov|Threshold (IM)}}; provided, however, that the {{imcsdprov|Credit Support Amount (IM)}} will be deemed to be zero whenever the calculation of the {{imcsdprov|Credit Support Amount (IM)}} yields a number less than zero.
{{Nutshell 2018 CSD 3(c)(iii)(B)}}
::(2) No Amendment to {{imcsdprov|Obligations}} in respect of {{imcsdprov|Margin Amount (IA)}}. The posting obligation of a {{imcsdprov|Chargor}} in respect of any amount that constitutes a {{imcsdprov|Margin Amount (IA)}} under any {{imcsdprov|Other CSA}} shall not be affected or amended in any way by the provisions of this Deed.
{{Nutshell 2018 CSD 3(c)(iii)(C)}}
:(B) If the “'''{{imcsdprov|Allocated Margin Flow (IM/IA) Approach}}'''” is specified as applicable in Paragraph {{imcsdprov|13}}, the following provisions will apply:
::(1) “'''{{imcsdprov|Credit Support Amount (IM)}}'''” means, with respect to a party as the {{imcsdprov|Chargor}}, for any {{imcsdprov|Calculation Date (IM)}}, (i) the {{imcsdprov|Margin Amount (IM)}} applicable to the {{imcsdprov|Chargor}}, if any, minus (ii) the {{imcsdprov|Chargor}}’s {{imcsdprov|Threshold (IM)}}; provided, however, that the {{imcsdprov|Credit Support Amount (IM)}} will be deemed to be zero whenever the calculation of the {{imcsdprov|Credit Support Amount (IM)}} yields a number less than zero.
::(2) Amendment to {{imcsdprov|Obligations}} in respect of {{imcsdprov|Margin Amount (IA)}}. The posting obligation of a {{imcsdprov|Chargor}} in respect of any amount that constitutes a {{imcsdprov|Margin Amount (IA)}} under any {{imcsdprov|Other CSA}} shall be reduced on an aggregate basis by the amount of the {{imcsdprov|Chargor}}’s {{imcsdprov|Credit Support Amount (IM)}}; provided, however, that if, after such reduction, any such {{imcsdprov|Margin Amount (IA)}} would be a negative amount, such {{imcsdprov|Margin Amount (IA)}} will be deemed to be zero. <br>
:(C) If the “'''{{imcsdprov|Greater of Margin Flow (IM/IA) Approach}}'''” is specified as applicable in Paragraph {{imcsdprov|13}}, the following provisions will apply:
::(1) “'''{{imcsdprov|Credit Support Amount (IM)}}'''” means, with respect to a party as the {{imcsdprov|Chargor}}, for any {{imcsdprov|Calculation Date (IM)}}, the greater of (i)(A) the {{imcsdprov|Margin Amount (IM)}} applicable to the {{imcsdprov|Chargor}}, if any, minus (B) the {{imcsdprov|Chargor}}’s {{imcsdprov|Threshold (IM)}} and (ii) the {{imcsdprov|Margin Amount (IA)}}; provided, however, that the {{imcsdprov|Credit Support Amount (IM)}} will be deemed to be zero whenever the calculation of the {{imcsdprov|Credit Support Amount (IM)}} yields a number less than zero.
::(2) Amendment to {{imcsdprov|Obligations}} in respect of {{imcsdprov|Margin Amount (IA)}}. The posting obligation of a {{imcsdprov|Chargor}} in respect of any amount that constitutes a {{imcsdprov|Margin Amount (IA)}} under any {{imcsdprov|Other CSA}}, other than such obligations of a {{imcsdprov|Chargor}} under this Deed, shall be reduced to zero. <br>

Latest revision as of 14:50, 19 April 2021

3(c)(iii) Margin Approach. Based on the “Margin Approach” specified in Paragraph 13 to govern the relationship between “Margin Amount (IM)” and “Margin Amount (IA)”, a Chargor’s “Credit Support Amount (IM)” on any Calculation Date (IM) will be:

(A) If “Distinct Margin Flow (IM) Approach” applies: Max [Margin Amount (IM) - Threshold (IM), 0], and the Chargor’s Margin Amount (IA) posting obligation under any Other CSA will not be affected in any way.
(B) If “Allocated Margin Flow (IM/IA) Approach” applies: Max [Margin Amount (IM) - Threshold (IM), 0] and its posting obligation for Margin Amount (IA) under any Other CSA will be reduced by that Credit Support Amount (IM) (subject to a minimum of zero).
(C) If “Greater of Margin Flow (IM/IA) Approach” applies: Max [Max [Margin Amount (IM) -Threshold (IM), Margin Amount (IA)], 0], and its posting obligation for Margin Amount (IA) under any Other CSA will be reduced to zero.
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