Template:Nutshell Equity Derivatives 12.9(b)(v): Difference between revisions
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:{{eqderivprov|12.9(b)(v)}} If “'''{{eqderivprov|Increased Cost of Stock Borrow}}'''” applies, the {{eqderivprov|Hedging Party}} may tell the {{eqderivprov|Non-Hedging Party}} that an {{eqderivprov|Increased Cost of Stock Borrow}} has happened and that it will make a {{eqderivprov|Price Adjustment}} to the {{eqderivprov|Transaction}}. | ::{{eqderivprov|12.9(b)(v)}} If “'''{{eqderivprov|Increased Cost of Stock Borrow}}'''” applies, the {{eqderivprov|Hedging Party}} may tell the {{eqderivprov|Non-Hedging Party}} that an {{eqderivprov|Increased Cost of Stock Borrow}} has happened and that it will make a {{eqderivprov|Price Adjustment}} to the {{eqderivprov|Transaction}}. | ||
:Within 2 {{eqderivprov|Scheduled Trading Days}} of that notice the {{eqderivprov|Non-Hedging Party}} must: | ::Within 2 {{eqderivprov|Scheduled Trading Days}} of that notice the {{eqderivprov|Non-Hedging Party}} must: | ||
::(A) amend the {{eqderivprov|Transaction}} to make the {{eqderivprov|Price Adjustment}}, | :::(A) amend the {{eqderivprov|Transaction}} to make the {{eqderivprov|Price Adjustment}}, | ||
::(B) pay the {{eqderivprov|Hedging Party}} the {{eqderivprov|Price Adjustment}} or | :::(B) pay the {{eqderivprov|Hedging Party}} the {{eqderivprov|Price Adjustment}} or | ||
::(C) terminate the {{eqderivprov|Transaction}} as of that second {{eqderivprov|Scheduled Trading Day}}. | :::(C) terminate the {{eqderivprov|Transaction}} as of that second {{eqderivprov|Scheduled Trading Day}}. | ||
:Within this period, the {{eqderivprov|Non-Hedging Party}} may lend | ::Within this period, the {{eqderivprov|Non-Hedging Party}} may lend the Hedging Party, the necessary {{eqderivprov|Hedging Shares}} at no more than the {{eqderivprov|Initial Stock Loan Rate}}. | ||
: | ::Absent such an election the {{eqderivprov|Hedging Party}} may terminate the {{eqderivprov|Transaction}}. On any termination of the {{eqderivprov|Transaction}}, the {{eqderivprov|Determining Party}} will determine the {{eqderivprov|Cancellation Amount}}. <br> | ||
Latest revision as of 17:15, 27 March 2020
- 12.9(b)(v) If “Increased Cost of Stock Borrow” applies, the Hedging Party may tell the Non-Hedging Party that an Increased Cost of Stock Borrow has happened and that it will make a Price Adjustment to the Transaction.
- Within 2 Scheduled Trading Days of that notice the Non-Hedging Party must:
- (A) amend the Transaction to make the Price Adjustment,
- (B) pay the Hedging Party the Price Adjustment or
- (C) terminate the Transaction as of that second Scheduled Trading Day.
- Within this period, the Non-Hedging Party may lend the Hedging Party, the necessary Hedging Shares at no more than the Initial Stock Loan Rate.
- Absent such an election the Hedging Party may terminate the Transaction. On any termination of the Transaction, the Determining Party will determine the Cancellation Amount.