Template:M summ GMSLA 11

Note that “{{{{{1}}}|Deliverable Securities}}” and “{{{{{1}}}|Receivable Securities}}” are judged from the perspective of the {{{{{1}}}|Defaulting Party}} being the one having to deliver or receive. This is quite confusing, especially when it comes to the whole question of determining a {{{{{1}}}|Default Market Value}}, which naturally is expressed from the perspective of the non-Defaulting Party, and indeed completely bamboozled the JC for a number of years. In any case, if — as you would expect — the {{{{{1}}}|Defaulting Party}} is failing to deliver {{{{{1}}}|Securities}} or {{{{{1}}}|Collateral}}, the {{{{{1}}}|Non-Defaulting Party}} has to go and get some securities and exercises a {{{{{1}}}|buy-in}}.

Tricks to watch out for, especially in illiquid stocks, is that the {{{{{1}}}|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.