Physical Settlement of Forward Transactions - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions
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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 9.2 in a Nutshell™

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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 (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. All payments and deliveries will be made through the Clearance Systems to the specified accounts of the Buyer or the Seller. view template

Full text of Section 9.2

Section 9.2. Physical Settlement of Forward Transactions. In respect of a Settlement Date under a Forward Transaction for which “Physical Settlement” is applicable, on the relevant Settlement Date: (a) in respect of a Share Forward Transaction: (i) if “Prepayment” is not applicable and “Variable Obligation” is not applicable, then Buyer will pay to Seller an amount equal to the Forward Price multiplied by the Number of Shares, and Seller will deliver to Buyer the Number of Shares to be Delivered and will pay to Buyer the Fractional Share Amount, if any; (ii) if “Prepayment” is not applicable and “Variable Obligation” is applicable, then Buyer will pay to Seller an amount equal to the Forward Floor Price multiplied by the Number of Shares, and Seller will deliver to Buyer the Number of Shares to be Delivered and will pay to Buyer the Fractional Share Amount, if any; and (iii) if “Prepayment” is applicable, then Seller will deliver to Buyer the Number of Shares to be Delivered and will pay to Buyer the Excess Dividend Amount, if any, and the Fractional Share Amount, if any; and (b) in respect of a Share Basket Forward Transaction: (i) if “Prepayment” is not applicable and “Variable Obligation” is not applicable, then Buyer will pay to Seller an amount equal to the Forward Price multiplied by the Number of Baskets, and, in respect of each Issuer comprising the Basket, Seller will deliver to Buyer the Number of Shares of such Issuer multiplied by the Number of Baskets to be Delivered (rounded as provided in Section 9.6) and will pay to Buyer the Fractional Share Amount, if any; (ii) if “Prepayment” is not applicable and “Variable Obligation” is applicable, then Buyer will pay to Seller an amount equal to the Forward Floor Price multiplied by the Number of Baskets, and, in respect of each Issuer comprising the Basket, Seller will deliver to Buyer the Number of Shares of such Issuer multiplied by the Number of Baskets to be Delivered (rounded as provided in Section 9.6) and will pay to Buyer the Fractional Share Amount, if any; and (iii) if “Prepayment” is applicable, then, in respect of each Issuer comprising the Basket, Seller will deliver to Buyer the Number of Shares of such Issuer multiplied by the Number of Baskets to be Delivered (rounded as provided in Section 9.6) and will pay to Buyer the Excess Dividend Amount, if any, and the Fractional Share Amount, if any. Any such payment and/or such delivery will be made through the relevant Clearance System(s) to the accounts of the Buyer or the Seller, as the case may be, specified in the related Confirmation. view template