Share - Equity Derivatives Provision
Template:Eqderivanat A serviceable distinction is to be drawn between the “Shares” specified in a Confirmation — which means the abstract concept of a notional particpating in the common stock of Teldar Paper etc., and is represented by a single ISIN — and the precise Number of Shares, being the defined quantity of those Shares relevant in assessing the Equity Notional Amount of a given Transaction.
Where you have a Basket, there will be a weighting of the individual Shares in the Basket which may be articulated in terms of a Number of Shares of that Issuer. This further piques the intellectual challenge.
“Underlier”?: There isn’t a generic catch-all term for the underlier of an Equity Derivatives Transaction. This is a pity, since “Index, Share or Basket as the case may be” isn’t the most elegant expression in the annals of legal literature. You might have used “Instrument” or even “Underlier” might do.
“Underlier” is a JC-spawned confection, and we do use it from time to time, when our patience with ISDA’s crack drafting squad™ and its leaden drafting becomes as shiny, thin and translucent as the seat of an old pair of suit trousers.