Derivative: Difference between revisions
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{{anat|isda|}} | {{anat|isda|{{subtable|'''[[Financial instrument - FCA Rulebook Term|Financial Instruments]]''' | ||
(1) [[Transferable securities]]; <br> | |||
(2) [[Money-market instrument]]s; <br> | |||
(3) [[Units in collective investment undertakings]] ({{tag|UCITS}}); <br> | |||
(4) [[Option]]s, [[future]]s, [[swap]]s, [[forward rate agreement]]s and any other [[derivative contract]]s relating to securities, currencies, interest rates or yields, or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash; <br> | |||
(5) [[Option]]s, [[future]]s, [[swap]]s, [[forward rate agreement]]s and any other [[derivative contract]]s relating to [[commodities]] that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event); <br> | |||
(6) [[Option]]s, [[future]]s, [[swap]]s and any other [[derivative contract]] relating to [[commodities]] that can be physically settled provided that they are traded on a regulated market and/or an MTF; <br> | |||
(7) [[Option]]s, [[future]]s, [[swap]]s, [[forward]]s and any other [[derivative contract]]s relating to [[commodities]], that can be physically settled not otherwise mentioned in C.6 and not being for commercial purposes, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are cleared and settled through recognised clearing houses or are subject to regular margin calls; | |||
(8) [[credit derivatives|Derivative instruments for the transfer of credit risk]]; <br> | |||
(9) Financial [[contract for differences|contracts for differences]]; <br> | |||
(10) Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event), as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market or an MTF, are cleared and settled through recognised clearing houses or are subject to regular margin calls. <br>}}}} | |||
A [[financial instrument]], feared in Nebraska as some kind of [[Financial weapons of mass destruction|WMD]], in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate [[hedging]] activity, and for legions of patient [[negotiator|negotiators]] in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table. | A [[financial instrument]], feared in Nebraska as some kind of [[Financial weapons of mass destruction|WMD]], in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate [[hedging]] activity, and for legions of patient [[negotiator|negotiators]] in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table. | ||
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Not, and especially now in light of the fabulous parallel regulation of the [[Securities Financing Transactions Regulation]], a [[stock loan]] or a [[repo]]. | Not, and especially now in light of the fabulous parallel regulation of the [[Securities Financing Transactions Regulation]], a [[stock loan]] or a [[repo]]. | ||
==Warning: boring stuff below this line== | |||
Where do you start? | Where do you start? | ||
:{{derivativecontractdefinition}} | :{{derivativecontractdefinition}} | ||
{{tag|MiFID}} definition of [[derivative]] comes from the latter half (items (4) - (10)) of the definition of “[[Financial instrument - FCA Rulebook Term|Financial Instruments]]” set out in Section C of Annex I to {{tag|MiFID}} as follows: | :{{tag|MiFID}} definition of [[derivative]] comes from the latter half (items (4) - (10)) of the definition of “[[Financial instrument - FCA Rulebook Term|Financial Instruments]]” set out in Section C of Annex I to {{tag|MiFID}} as follows: | ||
{{sa}} | {{sa}} | ||
*[[FWMD Top Trumps]] | *[[FWMD Top Trumps]] | ||
{{ref}} | {{ref}} | ||
Revision as of 17:25, 31 July 2020
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A financial instrument, feared in Nebraska as some kind of WMD, in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate hedging activity, and for legions of patient negotiators in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table.
Could be a swap[1], an option or a future
Not, and especially now in light of the fabulous parallel regulation of the Securities Financing Transactions Regulation, a stock loan or a repo.
Warning: boring stuff below this line
Where do you start?
- ‘derivative’ or ‘derivative contract’ means a financial instrument as set out in points (4) to (10) of Section C of Annex I to 2004/39/EC (EUR Lex)[2] as implemented by Article 38 and 39 of 1287/2006 (EUR Lex);
- MiFID definition of derivative comes from the latter half (items (4) - (10)) of the definition of “Financial Instruments” set out in Section C of Annex I to MiFID as follows: