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Two Affected Parties - ISDA Provision: Difference between revisions
Two Affected Parties - ISDA Provision (view source)
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{{ | {{fullanat2|isda|6(b)(iii)|2002|6(b)(iii)|1992}} | ||
{{becareful}} | {{becareful}} | ||
Exercise Caution here: Under the {{1992ma}} version, if your {{isdaprov|Failure To Pay}} also amounts to an {{isdaprov|Illegality}} it is deemed to be an Illegality, and if there are two {{isdaprov|Affected Parties}} there is a signficant delay in your ability to close out. | Exercise Caution here: Under the {{1992ma}} version, if your {{isdaprov|Failure To Pay}} also amounts to an {{isdaprov|Illegality}} it is deemed to be an Illegality, and if there are two {{isdaprov|Affected Parties}} there is a signficant delay in your ability to close out. | ||
==Differences between {{1992ma}} and {{2002ma}}== | ===Differences between {{1992ma}} and {{2002ma}}=== | ||
Note also that reference to Illegality has been excised from the {{2002ma}} version. | Note also that reference to Illegality has been excised from the {{2002ma}} version. | ||
Per Mr Firth’s bible, it was changed because it was found to be difficult in practice to implement a transfer or amendment after an {{isdaprov|Illegality}}. Also, it could be that people realised that if an {{isdaprov|Illegality}} occurred you don’t want to have to wait 30 days to terminate, especially since you cannot rely on {{isdaprov|2(a)(iii)}} to withhold payments in the mean time. | Per Mr Firth’s bible, it was changed because it was found to be difficult in practice to implement a transfer or amendment after an {{isdaprov|Illegality}}. Also, it could be that people realised that if an {{isdaprov|Illegality}} occurred you don’t want to have to wait 30 days to terminate, especially since you cannot rely on {{isdaprov|2(a)(iii)}} to withhold payments in the mean time. | ||
This was raised at a recent last {{ISDA}} meeting: {{A&O}} pointed out that there was a template amendment agreement to change the {{1992ma}} {{isdaprov|Illegality}} definition into the {{2002ma}} (if you don’t want to use the 2002 to start with). | This was raised at a recent last {{ISDA}} meeting: {{A&O}} pointed out that there was a template amendment agreement to change the {{1992ma}} {{isdaprov|Illegality}} definition into the {{2002ma}} (if you don’t want to use the 2002 to start with). | ||