Template:Failure to pay under GMSLA: Difference between revisions

From The Jolly Contrarian
Jump to navigation Jump to search
Created page with "Noting the exception for redelivery of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or {{gmslaprov|Collateral}}<ref>See {{gmslaprov|9.1(b)}} and {{gmslaprov|9.2(b)}}.</re..."
 
No edit summary
Line 1: Line 1:
Noting the exception for redelivery of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or {{gmslaprov|Collateral}}<ref>See {{gmslaprov|9.1(b)}} and {{gmslaprov|9.2(b)}}.</ref>, the failure to pay or deliver {{gmslaprov|Events of Default}} under the {{gmsla}} are:
Noting the exception for redelivery of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or {{gmslaprov|Collateral}}<ref>See {{gmslaprov|9.1(b)}} and {{gmslaprov|9.2(b)}}.</ref>, the failure to pay or deliver {{gmslaprov|Events of Default}} under the {{gmsla}} are:
*'''Cash {{eqderivprov|Collateral}} failures''': ''Any'' failure to pay or repay [[cash]] {{eqderivprov|Collateral}} when required — the theory being that you can’t blame an upstream counterparty for your failure to deliver cash;
*'''Cash {{gmslaprov|Collateral}} failures''': ''Any'' failure to pay or repay [[cash]] {{eqderivprov|Collateral}} when required — the theory being that you can’t blame an upstream counterparty for your failure to deliver [[cash]]<ref>For a jauntily [[Metaphysics|metaphysical]] examination of the nature of hard cold folding green stuff, see our article on [[cash]].</ref>;
*'''Non-cash {{gmslaprov|Collateral}} delivery failures''': Any failure to ''deliver'' non-cash {{gmslaprov|Collateral}} (either at inception of by way of further {{gmslaprov|Collateral}}). Here the {{gmslaprov|Borrower}} has discretion<ref>From those assets that meet the eligibility criteria in the Schedule; moral of story: don’t allow yourself to be too tightly constrained on eligibility criteria.</ref> on what {{gmslaprov|Collateral}} it delivers, so again doesn't have the excuse that it has suffered an upstream failure. Where it is a {{gmslaprov|Collateral}} return, the Lender has less discretion, so is more prone to upstream settlement failures. Note that non-delivery of {{gmslaprov|Securities}} at the commencement of a {{gmslaprov|Loan}} is also not a failure to pay. That just means the {{gmslaprov|Loan}} doesn’t happen.
*'''Non-cash {{gmslaprov|Collateral}} delivery failures''': Any failure to ''deliver'' non-cash {{gmslaprov|Collateral}} (either at inception of by way of further {{gmslaprov|Collateral}}). Here the {{gmslaprov|Borrower}} has discretion<ref>From those assets that meet the eligibility criteria in the Schedule; moral of story: don’t allow yourself to be too tightly constrained on eligibility criteria.</ref> on what {{gmslaprov|Collateral}} it delivers, so again doesn't have the excuse that it has suffered an upstream failure. Where it is a {{gmslaprov|Collateral}} return, the Lender has less discretion, so is more prone to upstream settlement failures. Note that non-delivery of {{gmslaprov|Securities}} at the commencement of a {{gmslaprov|Loan}} is also not a failure to pay. That just means the {{gmslaprov|Loan}} doesn’t happen.
*Any [[failure to pay]] ''following exercise of a [[mini closeout]]'' under Paragraph {{gmslaprov|9}}. That is, not a failure to redliver {{gmslaprov|Equivalent}} {{gmslaprov|Collateral}} or {{gmslaprov|Securities}}, but a failure to settle any [[mini close-out]] or [[buy-in]] ''following'' the [[mini closeout]].
*Any [[failure to pay]] ''following exercise of a [[mini closeout]]'' under Paragraph {{gmslaprov|9}}. That is, not a failure to redliver {{gmslaprov|Equivalent}} {{gmslaprov|Collateral}} or {{gmslaprov|Securities}}, but a failure to settle any [[mini close-out]] or [[buy-in]] ''following'' the [[mini closeout]].

Revision as of 11:37, 27 June 2019

Noting the exception for redelivery of Equivalent Securities or Collateral[1], the failure to pay or deliver Events of Default under the 2010 GMSLA are:

  1. See 9.1(b) and 9.2(b).
  2. For a jauntily metaphysical examination of the nature of hard cold folding green stuff, see our article on cash.
  3. From those assets that meet the eligibility criteria in the Schedule; moral of story: don’t allow yourself to be too tightly constrained on eligibility criteria.