Corporate actions - GMSLA Provision: Difference between revisions
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 3: | Line 3: | ||
Compare Clause {{gmsla2000prov|6.3}} of the {{2000gmsla}} | Compare Clause {{gmsla2000prov|6.3}} of the {{2000gmsla}} | ||
There is a slight tension between {{gmslaprov|6.5}} and {{gmslaprov|6.6}}: while a {{gmslaprov|Borrower}} is not obliged to vote in a certain way, if it does so and acquires a certain benefit ''and the {{gmslaprov|Lender}} requests'', it has to pass over that benefit. Best illustrated by way of example: | |||
{{box|{{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 {{tag|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}}. | |||
====See Also==== | ====See Also==== | ||
{{gmslaanatomy}} | {{gmslaanatomy}} | ||
Revision as of 15:16, 4 July 2013
Commentary
Compare Clause 6.3 of the 2000 GMSLA
There is a slight tension between 6.5 and 6.6: while a Borrower is not obliged to vote in a certain way, if it does so and acquires a certain benefit and the Lender requests, it has to pass over that benefit. 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.
See Also
update to anat|gmsla
|
Navigation 2018 Pledge GMSLA 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · 22 · 23 · 24 · 25 · 26 · 27 · 28 · Schedule · Agency Annex Stock lending agreement comparison: Includes navigation for the 2000 GMSLA and the 1995 OSLA |
2010 GMSLA: Full wikitext · Nutshell wikitext | GMLSA legal code | GMSLA Netting
Pledge GMSLA: Hard copy (ISLA) · Full wikitext · Nutshell wikitext |
1995 OSLA: OSLA wikitext | OSLA in a nutshell | GMSLA/PGMSLA/OSLA clause comparison table
From Our Friends On The Internet: Guide to equity finance | ISLA’s guide to securities lending for regulators and policy makers