Template:Nutshell Equity Derivatives 12.6(c): Difference between revisions

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{{eqderivprov|12.6(c)}} For the purpose of determining the consequence of any {{eqderivprov|Nationalization}}, {{eqderivprov|Insolvency}} or {{eqderivprov|Delisting}}: <br>
{{eqderivprov|12.6(c)}} When determining the consequence of any {{eqderivprov|Nationalization}}, {{eqderivprov|Insolvency}} or {{eqderivprov|Delisting}}: <br>
:(i) “'''[[Negotiated Close-out (Extraordinary Events) - Equity Derivatives Provision|Negotiated Close-out]]'''” means that the parties may, but are not obliged, to terminate the {{eqderivprov|Transaction}} on mutually acceptable terms and if the parties do not agree to terminate the {{eqderivprov|Transaction}}, then it continues on the terms and subject to the conditions then in effect, provided, that any {{eqderivprov|Physically-settled}} {{eqderivprov|Transaction}} will, at the election of either party, become a {{eqderivprov|Transaction}} to which {{eqderivprov|Cash Settlement}} is applicable, except that if a {{eqderivprov|Scheduled Valuation Date}} is a {{eqderivprov|Disrupted Day}}, the {{eqderivprov|Calculation Agent}} will ignore the provisions of Section {{eqderivprov|6.6}} relating to {{eqderivprov|Disrupted Day}}s and will instead determine its good faith estimate of the {{eqderivprov|Settlement Price}} or {{eqderivprov|Final Price}} as of the {{eqderivprov|Valuation Time}} on that {{eqderivprov|Valuation Date}}; <br>
:(i)if “'''{{eqderivprov|Negotiated Close-out}}'''” applies, then unless the parties agree to terminate the {{eqderivprov|Transaction}} it will continue, but either party may choose to [[Cash Settlement - Equity Derivatives Provision|cash settle]] a {{eqderivprov|Physically-settled}} {{eqderivprov|Transaction}}, and if a {{eqderivprov|Scheduled Valuation Date}} is a {{eqderivprov|Disrupted Day}}, the {{eqderivprov|Calculation Agent}} will ignore Section {{eqderivprov|6.6}} ({{eqderivprov|Disrupted Day}}s) and use its [[good faith]] estimate to determine the {{eqderivprov|Settlement Price}} or {{eqderivprov|Final Price}} as of the {{eqderivprov|Valuation Time}} on that {{eqderivprov|Valuation Date}}; <br>
:(ii) “'''[[Cancellation and Payment (Extraordinary Events) - Equity Derivatives Provision|Cancellation and Payment]]'''” means that the {{eqderivprov|Transaction}} will be cancelled as of the {{eqderivprov|Announcement Date}} and (A) in the case of an {{eqderivprov|Option Transaction}}, {{eqderivprov|Seller}} will pay to {{eqderivprov|Buyer}} the amount calculated in accordance with Section {{eqderivprov|12.7(b)}}, and (B) in the case of a {{eqderivprov|Forward Transaction}} or an {{eqderivprov|Equity Swap Transaction}}, an amount calculated in accordance with Section {{eqderivprov|12.7(c)}} will be paid by one party to the other; and <br>
:(ii) “'''[[Cancellation and Payment (Extraordinary Events) - Equity Derivatives Provision|Cancellation and Payment]]'''” means that the {{eqderivprov|Transaction}} will be cancelled as of the {{eqderivprov|Announcement Date}} and  
:(iii) “'''[[Partial Cancellation and Payment (Extraordinary Events) - Equity Derivatives Provision|Partial Cancellation and Payment]]'''” means that in respect of a {{eqderivprov|Share Basket Transaction}}, that portion of the {{eqderivprov|Share Basket Transaction}} represented by {{eqderivprov|Affected Shares}} will be cancelled as of the {{eqderivprov|Announcement Date}}, the amount calculated in accordance with Section {{eqderivprov|12.7}} in respect of such {{eqderivprov|Affected Shares}}, will be paid by one party to the other, the remainder of the {{eqderivprov|Share Basket Transaction}} will continue with the {{eqderivprov|Basket}} comprising {{eqderivprov|Shares}} that are not {{eqderivprov|Affected Shares}}, and the {{eqderivprov|Calculation Agent}} will adjust any relevant terms if necessary to preserve as nearly as practicable the economic terms of the {{eqderivprov|Transaction}} for the remaining {{eqderivprov|Shares}}. <br>
::(A) For {{eqderivprov|Option Transaction}}s, {{eqderivprov|Seller}} will pay {{eqderivprov|Buyer}} an amount calculated per Section {{eqderivprov|12.7(b)}};
::(B) For {{eqderivprov|Forward Transaction}}s or {{eqderivprov|Equity Swap Transaction}}s, one party will pay the other an amount calculated per Section {{eqderivprov|12.7(c)}}; and <br>
:(iii) “'''[[Partial Cancellation and Payment (Extraordinary Events) - Equity Derivatives Provision|Partial Cancellation and Payment]]'''” means that the portion of a {{eqderivprov|Share Basket Transaction}} representing {{eqderivprov|Affected Shares}} will be cancelled as of the {{eqderivprov|Announcement Date}}, the amount for the {{eqderivprov|Affected Shares}} will be calculated and paid per Section {{eqderivprov|12.7}} and the remainder of the {{eqderivprov|Share Basket Transaction}} will continue with the non-{{eqderivprov|Affected Shares}}, the {{eqderivprov|Calculation Agent}} adjusting any terms as necessary to preserve as far as possible the economic terms for the remaining {{eqderivprov|Share Basket}}. <br>

Latest revision as of 18:18, 20 January 2022

12.6(c) When determining the consequence of any Nationalization, Insolvency or Delisting:

(i)if “Negotiated Close-out” applies, then unless the parties agree to terminate the Transaction it will continue, but either party may choose to cash settle a Physically-settled Transaction, and if a Scheduled Valuation Date is a Disrupted Day, the Calculation Agent will ignore Section 6.6 (Disrupted Days) and use its good faith estimate to determine the Settlement Price or Final Price as of the Valuation Time on that Valuation Date;
(ii) “Cancellation and Payment” means that the Transaction will be cancelled as of the Announcement Date and
(A) For Option Transactions, Seller will pay Buyer an amount calculated per Section 12.7(b);
(B) For Forward Transactions or Equity Swap Transactions, one party will pay the other an amount calculated per Section 12.7(c); and
(iii) “Partial Cancellation and Payment” means that the portion of a Share Basket Transaction representing Affected Shares will be cancelled as of the Announcement Date, the amount for the Affected Shares will be calculated and paid per Section 12.7 and the remainder of the Share Basket Transaction will continue with the non-Affected Shares, the Calculation Agent adjusting any terms as necessary to preserve as far as possible the economic terms for the remaining Share Basket.
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