Template:M summ Equity Derivatives 12.9(a)(viii)
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When the Hedging Party notifies an Increased Cost of Stock Borrow, specifiying a proposed Price Adjustment, the non-Hedging Party has three options:
- Accept the Price Adjustment and the Transaction is amended accordingly;
- Make a one-off payment of the determined Price Adjustment; or
- Terminate the Transaction on the second Scheduled Trading Day.
Only if the Non-Hedging Party has failed to give any such election by the end of the second Scheduled Trading Day can the Hedging Party terminate the Transaction. The Non-Hedging Party can lend the Hedging Party the relevant Shares in the intervening period to mitigate its loss.