Hedging Disruption - Equity Derivatives Provision: Difference between revisions
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
Line 1: | Line 1: | ||
{{eqderivanat|12.9(a)(v)}} | {{eqderivanat|12.9(a)(v)}} | ||
===Regulator informal action=== | ===Regulator informal action=== | ||
Does a [[regulator]]’s direction to ditch a hedge mean a {{eqderivprov|Hedging Party}} is “unable to commercially reasonably maintain” its [[hedge]]? As long as there is no regulatory-approved alternative means of hedging (you know, | Does a [[regulator]]’s direction to ditch a hedge mean a {{eqderivprov|Hedging Party}} is “unable to commercially reasonably maintain” its [[hedge]]? | ||
As long as there is no regulatory-approved alternative means of hedging (you know, [[futures]], for example), then the [[JC]] says '''yes'''. The aspiration to maintain good relations with a body having power to regulate your operations, let alone a plausible apprehension of sanction (be it a monetary penalty, adverse publicity or the regulator barring you from operating in its market or just taking a dim view of your outfit) — provided it is sincere — is a [[reasonable]] commercial consideration which would prevent you from maintaining that hedge. | |||
===Why the “why should I pay your hedging costs? I have no control over them” argument is bogus=== | ===Why the “why should I pay your hedging costs? I have no control over them” argument is bogus=== |