Template:Nutshell Equity Derivatives 9.2: Difference between revisions
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{{eqderivprov|9.2}}. '''{{eqderivprov|Physical Settlement of Forward Transactions}}'''. For a {{eqderivprov|Settlement Date}} under a {{eqderivprov|Forward Transaction}} for which “'''{{eqderivprov|Physical Settlement}}'''” applies, on the relevant {{eqderivprov|Settlement Date}}: <br> | |||
:(a) | :(a) For a {{eqderivprov|Share Forward Transaction}}: <br> | ||
::(i) | ::(i) Neither “'''{{eqderivprov|Prepayment}}'''” or “'''{{eqderivprov|Variable Obligation}}'''” applies: | ||
::(ii) | :::{{eqderivprov|Buyer}} will pay to {{eqderivprov|Seller}} an amount equal to ''{{eqderivprov|Forward Price}} x {{eqderivprov|Number of Shares}}'', and | ||
::(iii) if “'''{{eqderivprov|Prepayment}}'''” | :::{{eqderivprov|Seller}} will deliver the {{eqderivprov|Number of Shares to be Delivered}} and pay any {{eqderivprov|Fractional Share Amount}} to {{eqderivprov|Buyer}}; <br> | ||
:(b) | ::(ii) “'''{{eqderivprov|Prepayment}}'''” does not apply and “'''{{eqderivprov|Variable Obligation}}'''” applies: | ||
::(i) | :::{{eqderivprov|Buyer}} will pay to {{eqderivprov|Seller}} ''{{eqderivprov|Forward Floor Price}} x {{eqderivprov|Number of Shares}}'' | ||
::(ii) | :::{{eqderivprov|Seller}} will deliver the {{eqderivprov|Number of Shares to be Delivered}} and pay any {{eqderivprov|Fractional Share Amount}} to {{eqderivprov|Buyer}}; and <br> | ||
::(iii) if “'''{{eqderivprov|Prepayment}}'''” | ::(iii) if “'''{{eqderivprov|Prepayment}}'''” applies, {{eqderivprov|Seller}} will deliver to {{eqderivprov|Buyer}} the {{eqderivprov|Number of Shares to be Delivered}} and will pay the {{eqderivprov|Excess Dividend Amount}}, if any, and any {{eqderivprov|Fractional Share Amount}}; and <br> | ||
:(b) For a {{eqderivprov|Share Basket Forward Transaction}}: <br> | |||
::(i) Neither “'''{{eqderivprov|Prepayment}}'''” or “'''{{eqderivprov|Variable Obligation}}'''” applies: | |||
:::{{eqderivprov|Buyer}} will pay to {{eqderivprov|Seller}} an amount equal to ''{{eqderivprov|Forward Price}} x {{eqderivprov|Number of Baskets}}'', and | |||
:::{{eqderivprov|Seller}} will deliver to {{eqderivprov|Buyer}} ''{{eqderivprov|Number of Shares}} of each {{eqderivprov|Issuer}} in the {{eqderivprov|Basket}} x {{eqderivprov|Number of Baskets to be Delivered}}'' (rounded per Section {{eqderivprov|9.6}}) and will pay any {{eqderivprov|Fractional Share Amount}} to {{eqderivprov|Buyer}}; <br> | |||
::(ii) “'''{{eqderivprov|Prepayment}}'''” does not apply and “'''{{eqderivprov|Variable Obligation}}'''” applies: | |||
:::{{eqderivprov|Buyer}} will pay to {{eqderivprov|Seller}} ''{{eqderivprov|Forward Floor Price}} x {{eqderivprov|Number of Baskets}}' and' | |||
:::{{eqderivprov|Seller}} will deliver to {{eqderivprov|Buyer}} ''{{eqderivprov|Number of Shares}} of each {{eqderivprov|Issuer}} in the {{eqderivprov|Basket}} x {{eqderivprov|Number of Baskets to be Delivered}}'' (rounded per Section {{eqderivprov|9.6}}) and will pay any {{eqderivprov|Fractional Share Amount}} to {{eqderivprov|Buyer}}; and <br> | |||
::(iii) if “'''{{eqderivprov|Prepayment}}'''” applies for each {{eqderivprov|Issuer}} comprising the {{eqderivprov|Basket}}, {{eqderivprov|Seller}} will deliver to {{eqderivprov|Buyer}} ''{{eqderivprov|Number of Shares}} x {{eqderivprov|Number of Baskets to be Delivered}}'' (rounded per Section {{eqderivprov|9.6}}) and will pay any {{eqderivprov|Excess Dividend Amount}} or {{eqderivprov|Fractional Share Amount}} to {{eqderivprov|Buyer}}. <br> | |||
All payments and deliveries will be made through the {{eqderivprov|Clearance System}}s to the specified accounts of the {{eqderivprov|Buyer}} or the {{eqderivprov|Seller}}. <br> | |||
Latest revision as of 17:17, 11 May 2022
9.2. Physical Settlement of Forward Transactions. For a Settlement Date under a Forward Transaction for which “Physical Settlement” applies, on the relevant Settlement Date:
- (a) For a Share Forward Transaction:
- (i) Neither “Prepayment” or “Variable Obligation” applies:
- Buyer will pay to Seller an amount equal to Forward Price x Number of Shares, and
- Seller will deliver the Number of Shares to be Delivered and pay any Fractional Share Amount to Buyer;
- (ii) “Prepayment” does not apply and “Variable Obligation” applies:
- Buyer will pay to Seller Forward Floor Price x Number of Shares
- Seller will deliver the Number of Shares to be Delivered and pay any Fractional Share Amount to Buyer; and
- (iii) if “Prepayment” applies, Seller will deliver to Buyer the Number of Shares to be Delivered and will pay the Excess Dividend Amount, if any, and any Fractional Share Amount; and
- (i) Neither “Prepayment” or “Variable Obligation” applies:
- (b) For a Share Basket Forward Transaction:
- (i) Neither “Prepayment” or “Variable Obligation” applies:
- Buyer will pay to Seller an amount equal to Forward Price x Number of Baskets, and
- Seller will deliver to Buyer Number of Shares of each Issuer in the Basket x Number of Baskets to be Delivered (rounded per Section 9.6) and will pay any Fractional Share Amount to Buyer;
- (ii) “Prepayment” does not apply and “Variable Obligation” applies:
- Buyer will pay to Seller Forward Floor Price x Number of Baskets' and'
- Seller will deliver to Buyer Number of Shares of each Issuer in the Basket x Number of Baskets to be Delivered (rounded per Section 9.6) and will pay any Fractional Share Amount to Buyer; and
- (iii) if “Prepayment” applies for each Issuer comprising the Basket, Seller will deliver to Buyer Number of Shares x Number of Baskets to be Delivered (rounded per Section 9.6) and will pay any Excess Dividend Amount or Fractional Share Amount to Buyer.
- (i) Neither “Prepayment” or “Variable Obligation” applies:
All payments and deliveries will be made through the Clearance Systems to the specified accounts of the Buyer or the Seller.