Adjustments to Certain Share Transactions and Share Basket Transactions in European Currencies - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions A Jolly Contrarian owner’s manual™ 11.3 in a Nutshell™ The JC’s Nutshell™ summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. You can even ask questions! Ask about it here. 11.3 in all its glory Section 11.3. Adjustments to Certain Share Transactions and Share Basket Transactions in European Currencies. In respect of a Share Transaction or Share Basket Transaction relating to Shares originally quoted, listed and/or dealt as of the Trade Date in a currency of a member state of the European Union that has not adopted the single currency in accordance with the EC Treaty, if such Shares are at any time after the Trade Date quoted, listed and/or dealt exclusively in euro on the relevant Exchange or, where no Exchange is specified, the principal market on which those Shares are traded, then the Calculation Agent will adjust any one or more of the Strike Price, the Forward Price, the Forward Floor Price, the Forward Cap Price, the Knock-in Price, the Knock-out Price, the Settlement Price, the Initial Price, the Final Price and any other variable relevant to the terms of the Transaction as the Calculation Agent determines appropriate to preserve the economic terms of the Transaction. The Calculation Agent will make any conversion necessary for purposes of any such adjustment as of the Valuation Time at an appropriate mid-market spot rate of exchange determined by the Calculation Agent prevailing as of the Valuation Time. No adjustments under this Section 11.3 will affect the currency denomination of any payment obligation arising out of the Transaction. edit Resources and Navigation 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 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 Premium version of this page

Overview

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Article 11. Adjustments and Modifications Affecting Indices, Shares and Transactions
Section 11.1 Adjustments to Indices

11.1(a) (Successor Indices)

11.1(b) (Index Adjustment Events)

11.1(b)(A) (Calculation Agent Adjustment (Adjustment Events))

11.1(b)(B) (Negotiated Close-out (Adjustment Events))

11.1(b)(C) (Cancellation and Payment (Adjustment Events))

Section 11.2. Adjustments to Share Transactions and Share Basket Transactions

11.2(a). Method of Adjustment

11.2(b). Options Exchange Adjustment

11.2(c). Calculation Agent Adjustment

11.2(d). Options Exchange

11.2(e). Potential Adjustment Event

Section 11.3. Adjustments to Certain Share Transactions and Share Basket Transactions in European Currencies
Section 11.4. Correction of Share Prices and Index Levels

Summary

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Well, it all seemed important at the time, but the Euro is now a thing, there can’t be too many equity derivative transactions that are still in flight nineteen years later, so you won’t spend a lot of time parsing this clause until another nation adopts the euro as its currency. Montenegro uses it anyway, and it seems more likely countries will leave rather than join in the current febrile environment, so we'll leave this one for now.

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See also

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• Brexit means Brexit