Calculation Agent

In the domain of derivatives and structured financial products, the role of the Calculation Agent is pivotal. This entity is charged with making the authoritative determinations and calculations that govern the performance and settlement of the transaction. The integrity of these calculations is fundamental to the trust between counterparties and the proper functioning of the contract.

Our Role

Aether provides a professional Process Agent service for international entities entering into contracts governed by the laws of a jurisdiction where they have no physical presence. Our appointment satisfies a key condition precedent in a vast range of financial agreements.

Rate Determination

Calculating floating interest rates, foreign exchange rates, and other variable amounts based on the specified benchmarks and formulas.

Valuation and Settlement

Determining mark-to-market values, settlement amounts, and any payments due upon early termination or other trigger events.

Event Determination

Making objective determinations upon the occurrence of specified credit events, market disruption events, or other contingencies defined in the contract.

Notification

Communicating all calculations and determinations to the relevant parties in a timely and transparent manner.

The Aether Advantage

In the majority of derivatives transactions, the Calculation Agent is one of the dealer counterparties to the trade. While standard practice, this arrangement creates a potential, and often perceived, conflict of interest. The rigour and impartiality of the agent’s calculations can be called into question, leading to disputes that can be costly and time-consuming to resolve.

Unconflicted Objectivity

Aether FS provides a definitive solution to this conflict. As a truly independent third party, we have no financial interest in the outcome of the calculations we perform. Our determinations are based solely on the contractual terms and observable market data, executed in good faith and using commercially reasonable procedures to produce a commercially reasonable result. Appointing Aether FS provides both counterparties with absolute confidence in the impartiality and integrity of the process.

Dispute Mitigation

The ISDA framework includes procedures for resolving disputes over calculations, but these can be complex, particularly for exotic instruments valued using proprietary internal models. By appointing an independent agent from the outset, the likelihood of such disputes arising is significantly reduced. Our transparent and defensible calculations provide a single, authoritative source of truth, preserving the commercial relationship between the counterparties.

Confidential Consultation

To ensure impartiality and precision in your financial transactions, please contact us to discuss our Calculation Agent services.