An interest rate cap in which there is, contrary to a regular cap (vanilla cap), no direct dependency between the reference rate and the frequency of both reset and payment dates. For example, in a regular cap, if the reference rate is based on six-month LIBOR, the cap’s reset and payment must take place semiannually. If the reference rate is based on three-month LIBOR, resetting and payment are carried out quarterly or every three months.
In contrast, in a general cap, there is no dependency between the reference rate and the resetting and payment frequencies. As such, the reference rate could be six-month LIBOR, with a quarterly resetting frequency and a monthly payment frequency.
