Template:M gen Equity Derivatives 12.9(b): Difference between revisions
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==={{eqderivprov|Consequences of Failure to Deliver}} under Section {{eqderivprov|12.9(b)(ii)}}=== | ==={{eqderivprov|Consequences of Failure to Deliver}} under Section {{eqderivprov|12.9(b)(ii)}}=== | ||
This is for [[physical settlement]] only. It is a beast of a definition, even when nutshelled, but relevant only if [[physical settlement]] is your bag. If you cash settle your [[equity swap|equity swaps]] — and in [[synthetic prime brokerage]], that’s kinda the point, you know — you can keep on truckin’. | This is for [[physical settlement]] only. It is a beast of a definition, even when nutshelled, but relevant only if [[physical settlement]] is your bag. If you cash settle your [[equity swap|equity swaps]] — and in [[synthetic prime brokerage]], that’s kinda the point, you know — you can keep on truckin’. | ||
==={{eqderivprov|Consequences of }} under Section {{eqderivprov|12.9(b)(iii)}}=== | |||
You may see a rider to this clause along the following lines: | |||
:“Where reasonably practical, the {{eqderivprov|Hedging Party}} must elect to terminate only the part of the {{isdaprov|Transaction}} with the {{eqderivprov|Number of Shares}} corresponding to the {{eqderivprov|Hedge Position}} that the {{eqderivprov|Hedging Disruption}} relates to, and the {{eqderivprov|Cancellation Amount}} is then determined over only the terminated part of the {{eqderivprov|Transaction}}”. | |||
==={{eqderivprov|Consequences of Loss of Stock Borrow}} under Section {{eqderivprov|12.9(b)(iv)}}=== | |||
See our article on {{eqderivprov|Loss of Stock Borrow}} which discussed the event, and its consequences in a single, joined up, safe space. | |||
==={{eqderivprov|Consequences of Increased Cost of Stock Borrow}} under Section {{eqderivprov|12.9(b)(v)}}=== | |||
See our article on {{eqderivprov|Increased Cost of Stock Borrow}} which discussed the event, and its consequences holistically, like. | |||
==={{eqderivprov|Consequences of Increased cost of Hedging}} under Section {{eqderivprov|12.9(b)(vi)}}=== | |||
==={{eqderivprov|Consequences of Hedging Disruption and Loss of Stock Borrow}} under {{eqderivprov|12.9(b)(vii)}}=== | ==={{eqderivprov|Consequences of Hedging Disruption and Loss of Stock Borrow}} under {{eqderivprov|12.9(b)(vii)}}=== | ||
If the same event could be a {{eqderivprov|Hedging Disruption}} ''or'' a {{eqderivprov|Loss of Stock Borrow}}, it will be treated as a {{eqderivprov|Loss of Stock Borrow}}. The remedies for that are marginally less stentorian. | If the same event could be a {{eqderivprov|Hedging Disruption}} ''or'' a {{eqderivprov|Loss of Stock Borrow}}, it will be treated as a {{eqderivprov|Loss of Stock Borrow}}. The remedies for that are marginally less stentorian. | ||
Revision as of 14:31, 13 May 2022
Consequences of Change in Law or Insolvency Filing under Section 12.9(b)(i)
Your counterparties — or at any rate, their legal departments — may enjoy the intellectual challenge of jousting over the precise number of days’ notice one must give before decreeing and acting upon a Change in Law or Insolvency Filing. The practical reality here is that a sensible broker will be in touch with affected clients and will manage out of such a position by some kind of consent without reaching for a copy of the agreement, and a non-sensible broker won’t have clients for very long, but that is not how legal eagles are conditioned to think.
Consequences of Failure to Deliver under Section 12.9(b)(ii)
This is for physical settlement only. It is a beast of a definition, even when nutshelled, but relevant only if physical settlement is your bag. If you cash settle your equity swaps — and in synthetic prime brokerage, that’s kinda the point, you know — you can keep on truckin’.
Consequences of under Section 12.9(b)(iii)
You may see a rider to this clause along the following lines:
- “Where reasonably practical, the Hedging Party must elect to terminate only the part of the Transaction with the Number of Shares corresponding to the Hedge Position that the Hedging Disruption relates to, and the Cancellation Amount is then determined over only the terminated part of the Transaction”.
Consequences of Loss of Stock Borrow under Section 12.9(b)(iv)
See our article on Loss of Stock Borrow which discussed the event, and its consequences in a single, joined up, safe space.
Consequences of Increased Cost of Stock Borrow under Section 12.9(b)(v)
See our article on Increased Cost of Stock Borrow which discussed the event, and its consequences holistically, like.
Consequences of Increased cost of Hedging under Section 12.9(b)(vi)
Consequences of Hedging Disruption and Loss of Stock Borrow under 12.9(b)(vii)
If the same event could be a Hedging Disruption or a Loss of Stock Borrow, it will be treated as a Loss of Stock Borrow. The remedies for that are marginally less stentorian.