Determining Party

This Issue in United States

Determining Party

Concept of Determining Party in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): In the event of a cancellation as a result of an extraordinary event, a payment (cancellation amount) needs to be determined. As the determining party is theoretically a neutral third party, they will have no costs or liabilities tied up in the transaction and as a result, their cancellation amount will be zero. The election of a third party as determining party ensures that a valid cancellation amount will be established.

Resources

See Also

• Derivatives Contract