Calculation Agent

This Issue in United States

Calculation Agent

Concept of Calculation Agent in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The party designated as such in relation to an OTC (over the counter) derivative (i.e. an instrument that transfers risk from one party to the other) transaction. The calculation agent acts in good faith and a commercially reasonable manner to make determinations relating to any adjustments, disruptions, valuations and settlements that occur throughout the life of the transaction. In most cases the calculation agent will be one of the parties to the transaction. The calculation agent will usually be a professional market maker (for example an investment bank). If both parties to the transaction are market makers then they can be both deemed joint calculation agents and all determinations will need to be agreed by both parties.

Resources

See Also

• Derivatives Contract