Valuation Agent - CSA Provision

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1995 ISDA Credit Support Annex (English Law)
A Jolly Contrarian owner’s manual™

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Paragraph 11(c)(i) in a Nutshell

Use at your own risk, campers!

Full text of Paragraph 11(c)(i)

11(c)(i)Valuation Agent” means, for purposes of Paragraphs 2 and 4, the party making the demand under Paragraph 2, and, for purposes of Paragraph 5(c), the Transferee, as applicable, unless otherwise specified here: ...
The varieties of ISDA CSA
Subject 1994 NY 1995 Eng 2016 VM NY 2016 VM Eng 2018 IM Eng
Preamble Pre Pre Pre Pre Pre
Interpretation 1 1 1 1 1
Security Interest 2 - 2 - 2
Credit Support Obligations 3 2 3 2 3
Transfers, Calculations and Exchanges - 3 - 3 -
Conditions Precedent, Transfer Timing, Calculations and Substitutions 4 - 4 - 4
Dispute Resolution 5 4 5 4 5
Holding and Using Posted Collateral 6 - 6 - 6
Transfer of Title, No Security Interest - 5 - 5 -
Events of Default 7 6 7 6 7
Rights and Remedies 8 - 8 - 7
Representations 9 7 9 7 9
Expenses 10 8 10 8 10
Miscellaneous 11 9 11 9 11
Definitions 12 10 12 10 12
Elections and Variables 13 11 13 11 13
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Content and comparisons

Keine wechsel fin the 2016 super VM version. No tremendous surprise really.

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See also

Just why one needs to call the person making a demand for Credit Support under a CSA a Valuation Agent, and not — well, the Party making the demand — seeing as that person is acting for themselves is not in any sense anyone’s agent (no, you can’t be your own agent, however much legal eagles would like that to be so. The principle — which I just made up but based off a real Latinism, is nemo agens in causa sua.)[1]

The starting proposition, which hasn’t really changed since the salad days of the First Men at the dawn of the Age of Swaps, is that if you are a big enough boy to trade derivatives, you are big enough — short hand for “have a treasury function of some kind competent enough” — to calculate your own margin requirements. This largely remains the case, though there are a few categories of financial services fauna who are not: Repackaging vehicles, for one, and investment funds who have outsourced their asset management to an investment adviser for another — and those margin borrowers and hedgies with prime brokerage relationships may find them being obliged to hand over the margin function, all for fairly sensible reasons.

And show me the legal eagle who doesn’t like a multi-level waterfall replacement Valuation Agents, reference dealers, law society presidents, professional arbitrators and other fallback waifs and strays should the parties not enjoy their agents’ valuations, should they not be forthcoming in a timely way etc.

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References