Knock-in Reference Security - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions A Jolly Contrarian owner’s manual™ Resources and navigation 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 Section 1.46 in a Nutshell™ Use at your own risk, campers! 1.46. “Knock-in Reference Security” means, where a Knock-in Event applies, the index, share or basket specified as such in the Confirmation or, if not specified, the specified Underlier. view template Full text of Section 1.46 Section 1.46. Knock-in Reference Security. “Knock-in Reference Security” means, in respect of a Transaction for which a Knock-in Event is specified as being applicable, the index, share, other security or basket specified as such in the related Confirmation. In the event that the related Confirmation does not specify a Knock-in Reference Security, the Knock-in Reference Security will be deemed to be the same Index, Share or Basket, as the case may be, specified in the related Confirmation. view template Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

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Summary

Eine kleine uberengineering from ISDA’s crack drafting squad™ — for we delta-one synthetic equity swap simpletons, at any rate, it is hard to see why, if you are referencing an Underlier A, that your Knock-in/out Event might reference another share or index altogether — I mean, why would you? — but remember this document is a product of its time, and its time was the heady early noughties, where everyone (bar Warren Buffett) thought that derivatives had solved the problem of systemic risk in the financial markets, rather than aggravating it, and super complex packages teasing apart and allocating correlation risks were all the rage — mainly in the credit derivatives world, to be fair — but look, you never know.

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