Forward Transactions - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions A Jolly Contrarian owner’s manual™ 4 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. 4 in all its glory Article 4 General Terms Relating to Forward Transactions Section 4.1. Certain Definitions Relating to Forward Transactions. When used in respect of a Forward Transaction, the following terms have the indicated meanings: 4.1(a) Forward Price. “Forward Price” means: (i) in respect of an Index Forward Transaction, the level of the relevant Index specified or otherwise determined as provided in the related Confirmation; (ii) in respect of a Share Forward Transaction, the price per Share specified or otherwise determined as provided in the related Confirmation; (iii) in respect of an Index Basket Forward Transaction, the amount per Basket specified or otherwise determined as provided in the related Confirmation; and (iv) in respect of a Share Basket Forward Transaction, the amount per Basket specified or otherwise determined as provided in the related Confirmation. 4.1(b) Forward Floor Price. “Forward Floor Price” means the level of the Index, price per Share or amount per Basket, as applicable, specified or otherwise determined as provided in the related Confirmation. 4.1(c) Forward Cap Price. “Forward Cap Price” means the level of the Index, price per Share or amount per Basket, as applicable, specified or otherwise determined as provided in the related Confirmation. Section 4.2. Terms Relating to Prepayment. 4.2(a) Payment of the Prepayment Amount. In respect of a Forward Transaction to which “Prepayment” is specified as applicable in the related Confirmation, Buyer shall pay Seller the Prepayment Amount on the Prepayment Date. 4.2(b) Prepayment Amount. “Prepayment Amount” means the amount specified or otherwise determined as provided in the related Confirmation. 4.2(c) Prepayment Date. “Prepayment Date” means the date specified or otherwise determined as provided in the related Confirmation, or, if such date is not a Currency Business Day, the next following Currency Business Day. If the Prepayment Date is not specified in the related Confirmation, the Prepayment Date will fall on the date that is one Settlement Cycle following the Trade Date, or if such date is not an Exchange Business Day that is a Currency Business Day, the next following Exchange Business Day that is a Currency Business Day. 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 Prime Brokerage Premium version of this page

Overview

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Article 4 General Terms Relating to Forward Transactions

Section 4.1. Certain Definitions Relating to Forward Transactions

4.1(a) Forward Price
4.1(b) Forward Floor Price
4.1(c) Forward Cap Price

Section 4.2. Terms Relating to Prepayment

4.2(a) Payment of the Prepayment Amount
4.2(b) Prepayment Amount
4.2(c) Prepayment Date

Summary

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If, having read the whole of Article 4, you are still feeling none the wiser about Forward Transactions, you are in good company, so fear not.

Definitions: One of the more pointless chapters in a definitions book well endowed with them, the definitions from Chapter 4 basically amount to “look in the Confirmation”.

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• The JC’s famous Nutshell™ summary of this clause
• Prepayments: what if the confirm says nothing?

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See also

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More enlightening is the Cash Settlement terms or Article 8 (as to which see Article 8.4 (Cash Settlement of Forward Transactions) and 8.5 (Forward Cash Settlement Amount) an Article 9 about Physical Settlement (there see Article 9.2, 9.4, 9.5 and 9.6).