Template:M summ Equity Derivatives 12.9(a)(viii): Difference between revisions
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When the {{eqderivprov|Hedging Party}} notifies an {{eqderivprov|Increased Cost of Stock Borrow}}, specifiying a proposed {{eqderivprov|Price Adjustment}}, the non-Hedging Party has three options: | [[12.9(a)(viii) - Equity Derivatives Provision|When]] the {{eqderivprov|Hedging Party}} notifies an {{eqderivprov|Increased Cost of Stock Borrow}}, specifiying a proposed {{eqderivprov|Price Adjustment}}, the non-Hedging Party has three options: | ||
*Accept the {{eqderivprov|Price Adjustment}} and the {{eqderivprov|Transaction}} is amended accordingly; | *Accept the {{eqderivprov|Price Adjustment}} and the {{eqderivprov|Transaction}} is amended accordingly; | ||
*Make a one-off payment of the determined {{eqderivprov|Price Adjustment}}; or | *Make a one-off payment of the determined {{eqderivprov|Price Adjustment}}; or | ||
*Terminate the {{eqderivprov|Transaction}} on the second {{eqderivprov|Scheduled Trading Day}}. | *Terminate the {{eqderivprov|Transaction}} on the second {{eqderivprov|Scheduled Trading Day}}. | ||
Only if the {{eqderivprov|Non-Hedging Party}} has failed to give any such election by the end of the second {{eqderivprov|Scheduled Trading Day}} can the {{eqderivprov|Hedging Party}} terminate the {{eqderivprov|Transaction}}. The {{eqderivprov|Non-Hedging Party}} can lend the {{eqderivprov|Hedging Party}} the relevant {{eqderivprov|Shares}} in the intervening period to mitigate its loss. | Only if the {{eqderivprov|Non-Hedging Party}} has failed to give any such election by the end of the second {{eqderivprov|Scheduled Trading Day}} can the {{eqderivprov|Hedging Party}} terminate the {{eqderivprov|Transaction}}. The {{eqderivprov|Non-Hedging Party}} can lend the {{eqderivprov|Hedging Party}} the relevant {{eqderivprov|Shares}} in the intervening period to mitigate its loss. | ||
Revision as of 08:40, 4 May 2021
When the Hedging Party notifies an Increased Cost of Stock Borrow, specifiying a proposed Price Adjustment, the non-Hedging Party has three options:
- Accept the Price Adjustment and the Transaction is amended accordingly;
- Make a one-off payment of the determined Price Adjustment; or
- Terminate the Transaction on the second Scheduled Trading Day.
Only if the Non-Hedging Party has failed to give any such election by the end of the second Scheduled Trading Day can the Hedging Party terminate the Transaction. The Non-Hedging Party can lend the Hedging Party the relevant Shares in the intervening period to mitigate its loss.