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Template:M summ Equity Derivatives 12.9(a)(viii): Difference between revisions
Template:M summ Equity Derivatives 12.9(a)(viii) (view source)
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[[12.9(a)(viii) - Equity Derivatives Provision|A]] gentler provision than Loss of Stock Borrow — wherein the non-hedging party has to either find a stock borrow for the Hedging Party to execute, or be closed out of its position like that, under an {{eqderivprov|Increased Cost of Stock Borrow}}, if the {{eqderivprov|Hedging Party}} notifies an {{eqderivprov|Increased Cost of Stock Borrow}}, specifying a proposed {{eqderivprov|Price Adjustment}}, the non-{{eqderivprov|Hedging Party}} has three options: | |||
*Accept the {{eqderivprov|Price Adjustment}} | *Accept the {{eqderivprov|Price Adjustment}}, the {{eqderivprov|Transaction}} is amended and carries on as repriced; | ||
*Make a one-off payment of the determined {{eqderivprov|Price Adjustment}}; or | *Make a one-off payment of the determined {{eqderivprov|Price Adjustment}}; or | ||
* | *Allow the [[dealer]]<ref>The dealer will ''always'' be the Hedging Party, though you may on occasion have trouble persuading [[buy-side counsel]] of this patently obvious fact.</ref> to terminate the {{eqderivprov|Transaction}} on the second {{eqderivprov|Scheduled Trading Day}}. | ||
Only if the {{eqderivprov|Non-Hedging Party}} has failed to give any such election by the end of the second {{eqderivprov|Scheduled Trading Day}} can the {{eqderivprov|Hedging Party}} terminate the {{eqderivprov|Transaction}}. The {{eqderivprov|Non-Hedging Party}} can lend the {{eqderivprov|Hedging Party}} the relevant {{eqderivprov|Shares}} in the intervening period to mitigate its loss. | Only if the {{eqderivprov|Non-Hedging Party}} has failed to give any such election by the end of the second {{eqderivprov|Scheduled Trading Day}} can the {{eqderivprov|Hedging Party}} terminate the {{eqderivprov|Transaction}}. The {{eqderivprov|Non-Hedging Party}} can lend the {{eqderivprov|Hedging Party}} the relevant {{eqderivprov|Shares}} in the intervening period to mitigate its loss. | ||