Loss of Stock Borrow - Equity Derivatives Provision

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Definition

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Operative Provision

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But see also 12.9(b)(vii) which deals with the tension between LOSB and Hedging Disruption.

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Commentary

Summary: Where the Hedging Party can't locate a stock borrow, the Non-Hedging Party has the option to source one that is struck at less than the Maximum Stock Loan Rate within two Scheduled Trading Days, failing which the Hedging Party can terminate the Transaction. Where LOSB and Hedging Disruption both apply and the same event could qualify as either, it will hbe treated as a LOSB (which has milder consequences for the affected party).

Compare and contrast with Increased Cost of Stock Borrow. There is a logical handoff and interaction between the two.

Related Provisions

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