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| {{gmslasnap|10.1(a)}}
| | #redirect[[Events of Default - GMSLA Provision]] |
| {{comm}}
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| {{nuts|GMSLA|10.1(a)}}
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| ===Commentary===
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| There are great tales of worthy fellows around the market trying to tweak this provision because, by apparent oversight, it doesn't capture a failure to ''return'' {{gmslaprov|Equivalent}} (non cash) {{gmslaprov|Collateral}}.
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| But this is not an accident, for the same reason a failure to redeliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} isn't an {{gmslaprov|Event of Default}}. Indeed, it is a plainly deliberate omission. The drafters were careful to capture the payment or repayment of cash, and deliveries and ''further'' deliveries of Collateral, but not the return of {{gmslaprov|Equivalent}} {{gmslaprov|Collateral}}.
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| A counterparty may have on-lent, or on-collateralised, with non-cash {{gmslaprov|Collateral}} it has been posted. It may have exactly the same difficulties in getting hold of it to redeliver as a borrower may in getting hold of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}}. So the remedy is to withhold the return of securities, buy in and {{isdaprov|mini close-out}} under {{gmslaprov|9.2}} which gives the aggrieved party equivalent rights, but not the right to close out the whole agreement (until there's a failure of the mini-close out settlement amount itself).
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| ===GMSLA Equivalence===
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| {{gmsla equivalence}}
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| ====See Also====
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| {{gmslaanatomy}}
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Latest revision as of 17:34, 7 January 2022