Template:Buy-in: Difference between revisions

Latest revision as of 10:27, 31 March 2022

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-====Exercising a buy-in====
+#redirect[[Gmsla deliverable and receivable securities capsule]]
-Note that to determine the {{gmslaprov|Default Market Value}} where a {{gmslaprov|defaulting party}} is failing on a delivery of {{gmslaprov|securities}} or {{gmslaprov|collateral}} under a {{gmslaprov|loan}} the {{gmslaprov|non-defaulting party}} must '''sell''' (''not'' buy) securities equivalent to those it is expecting back from a {{gmslaprov|Non-Defaulting Party}}. This, we think, is to ensure that the price is "real": the temptation otherwise would be for the {{gmslaprov|Non-Defaulting Party}} to accept any old bid or offer, safe in the knowledge it can pass the cost on to the {{gmslaprov|Defaulting Party}}.
-Tricks to watch out for, especially in illiquid stocks, is that the {{gmslaprov|Non-Defaulting Party}} is not somehow influencing the price at which that innocent third party might transact (by agreeing to enter an offsetting transaction at the same time). That would be fraudulent, of course.