Template:Gmsla income
Kinda wide, no?
Not so much.
- “with respect to” is not the greatest choice of words: it is far too mealy-mouthed, but what it means — what it can only mean is “under”. In the context of securities lending this must mean payments made under the terms of the instruments themselves. That is, payments made by the issuer, and to shareholders qua shareholders as a pure function of their ownership of the securities. Such payments are restricted to dividends and dividend-like payments: rewards to the shareholder for the prudent management and healthy profitability of the company in general.
- “any Securities”: It is implicit also that the distributions contemplated by paragraph 6.2 should be available pari passu to all shareholders of the same class that is subject to the stock loan. This we can derive from the expression “…with respect to any Securities” . The distribution must be with respect to any Securities, not just some of them. The contract cannot function otherwise, for it would be impossible to determine which distribution would be required to be manufactured under the stock loan. The Securities actually delivered to the Borrower are no more determinative than any others, for, the basic premise of a stock loan is to facilitate a short sale: it should be in no-one’s contemplation that the Borrower would hold any borrowed Securities in inventory.
- “…other distributions of any kind whatsoever”: Under general rules of contractual interpretation under English law, wherever general words follow specific words, the general words should be read to include only objects similar in nature to those specific words. So, “other distributions of any kind whatsoever” is to be read as subject to preceding words “dividends, interests” to mean, effectively, “any dividend-like or interest-like distributions of any kind whatsoever”. This interpretation is supported by the text of the UK Tax Addendum, which relates exclusively to dividend withholding, refers to any payment made under Clause 6.2, not just dividend-like ones.