Change in Law - Equity Derivatives Provision

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12.9(a)(ii) in a Nutshell™ _{(equity derivatives edition)}

12.9(a)(ii) “Change in Law” means either party determines that, due to a change in law or regulation:

(X) it becomes illegal to buy, sell or hold underlying Shares or;

(Y) it becomes materially more expensive to perform the Transaction.

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Commentary

Omission of "material increase in costs" limb

The industry has generally moved to omit the "Increased Cost of Hedging" aspects of this definition (because it is dealt with there). You may see this expressed as: "Applicable, provided that section 12.9(a)(ii)(Y) of the Equity Definitions does not apply." See also, for example, the 2007 European Master Equity Derivatives Confirmation Agreement, which provides the following:

Consequences

The consequences of a Change in Law (or an Insolvency Filing are set out in 12.9(b)(i): Template:Eqderivsnap