Template:M summ GMSLA 6.7: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "''Compare Paragraph {{gmsla2000prov|6.4}} of the {{2000gmsla}}, which (ahem ~spoiler alert~) is materially the same'' There is a tension between {{gmslaprov|6.6}} and {{gmsl..." |
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''Compare Paragraph {{gmsla2000prov|6.4}} of the {{2000gmsla}}, which (ahem ~spoiler alert~) is materially the same'' | ''Compare Paragraph {{gmsla2000prov|6.4}} of the {{2000gmsla}}, which (ahem ~spoiler alert~) is materially the same'' | ||
There is a tension between {{gmslaprov|6.6}} and {{gmslaprov|6.7}}: while under {{gmslaprov|6.6}} a {{gmslaprov|Borrower}} is not obliged to ''vote'' in a certain way, for a corporate action — even one involving a lender option — the {{gmslaprov|Lender}} may requests the Equivalent securities be returned with the rights taken up. | [[6.7 - GMSLA Provision|There]] is a tension between {{gmslaprov|6.6}} and {{gmslaprov|6.7}}: while under {{gmslaprov|6.6}} a {{gmslaprov|Borrower}} is not obliged to ''vote'' in a certain way, for a corporate action — even one involving a lender option — the {{gmslaprov|Lender}} may requests the Equivalent securities be returned with the rights taken up. | ||
Best illustrated by way of example: | Best illustrated by way of example: | ||
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:''{{italianwithdrawalright}}'' | :''{{italianwithdrawalright}}'' | ||
In this case the {{gmslaprov|Lender}} who has lent out over the [[record date]] could not (without prior agreement) oblige the {{gmslaprov|Borrower}} to vote against the | In this case the {{gmslaprov|Lender}} who has lent out over the [[record date]] could not (without prior agreement) oblige the {{gmslaprov|Borrower}} to vote against the [[merger]], but if the {{gmslaprov|Borrower}} has done so, the {{gmslaprov|Lender}} can, by request under {{gmslaprov|6.7}}, require the {{gmslaprov|Borrower}} to deliver the proceeds of the withdrawal in lieu of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}}. | ||
Latest revision as of 13:30, 14 August 2024
Compare Paragraph 6.4 of the 2000 GMSLA, which (ahem ~spoiler alert~) is materially the same
There is a tension between 6.6 and 6.7: while under 6.6 a Borrower is not obliged to vote in a certain way, for a corporate action — even one involving a lender option — the Lender may requests the Equivalent securities be returned with the rights taken up.
Best illustrated by way of example:
- Under Italian Law a shareholder on the Record Date who does not vote in favour of a proposed merger acquires a “withdrawal right” if the merger is approved. The withdrawal right allows a shareholder who abstained or voted against the merger to be cashed out of the equity at a pre-defined price equal to the average closing price published by Borsa Italiana for the six months prior to the notification date for the merger. It is therefore possible that the withdrawal right as a call option over the stock. It is only exercisable if the shareholder does not vote.
In this case the Lender who has lent out over the record date could not (without prior agreement) oblige the Borrower to vote against the merger, but if the Borrower has done so, the Lender can, by request under 6.7, require the Borrower to deliver the proceeds of the withdrawal in lieu of Equivalent Securities.