Insolvency Filing - Equity Derivatives Provision

Equity Derivatives Anatomy™ →Go uptown 12.9(a)(iv) “Insolvency Filing” means that the Issuer institutes or has instituted against it by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, or it consents to a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official or it consents to such a petition, provided that proceedings instituted or petitions presented by creditors and not consented to by the Issuer shall not be deemed an Insolvency Filing; (view template) Resources About the Equity Derivatives Definitions | (full wikitext) | (nutshell wikitext) | Equity v credit derivatives showdown Hot topics Synthetic Prime Brokerage Anatomy | The Triple Cocktail | Cancellation and Payment | Calculation Agent TOC | 1 General Definitions | 2 Option Transactions | 3 Exercise of Options | 4 Forward Transactions | 5 Equity Swap Transactions | 6 Valuation | 7 Settlement | 8 Cash Settlement | 9 Physical Settlement | 10 Dividends | 11 Adjustments and Modifications | 12 Extraordinary Events · 12.8 Cancellation Amount · 12.9 Additional Disruption Events · 12.9 List of ADEs · 12.9(b) Consequences of ADEs | 13 Miscellaneous Index: Click ᐅ to expand: Equity Derivatives - Premium Synthetic Prime Brokerage Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

From the User's Guide:

Insolvency Filing. Section 12.9(a)(iv) defines the third possible Additional Disruption Event, Insolvency Filing. Insolvency Filing is defined as an insolvency or bankruptcy proceeding instituted by the Issuer or a regulator, supervisor or similar official with primary insolvency or regulatory jurisdiction over the Issuer. An Insolvency Filing should be distinguished from the much narrower definition of Insolvency as set forth in Section 12.6(a)(ii), discussed above. Unlike the comparable provision in the ISDA Master Agreement, an Insolvency Filing specified as an Additional Disruption Event has no grace period associated with it and is not triggered by an involuntary filing by creditors (i.e., persons other than the Issuer or a regulatory, supervisor or other sinlilar official) that has not been dismissed within 15 days.

Section 12.9(b)(i) sets forth the consequence of an Insolvency Filing. As with Change in Law, if an Insolvency Filing occurs, either party may elect to terminate the Transaction upon at least two Scheduled Trading Days' notice to the other party. Upon the provision of such notice, the Transaction will terminate and the Determining Party will determine the Cancellation Amount payable by one party to the other party.