Borrower’s failure to deliver Equivalent Securities - GMSLA Provision: Difference between revisions

Borrower’s failure to deliver Equivalent Securities - GMSLA Provision (view source)

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 ===So why isn’t a failure to return borrowed stock an {{gmslaprov|Event of Default}}?===
-This reflects the reality that settlement failures in the equities markets are common and, seeing as the whole point of a [[stock loan]] is to provide the {{Gmslaprov|borrower}} with a security it can [[sell short]], the {{gmslaprov|Borrower}} is likely to be relying on someone else settling the security into it before it can return the security to the {{gmslaprov|Lender}} — as such the {{gmraprov|Borrower}}’s failure is not necessarily evidence that your {{gmslaprov|Borrower}} is about to auger into the side of a hill.
+This reflects the reality that settlement failures in the equities markets are common and, seeing as the whole point of a [[stock loan]] is to provide the {{Gmslaprov|borrower}} with a security it can [[sell short]], the {{gmslaprov|Borrower}} is likely to be relying on someone else settling the security into it before it can return the security to the {{gmslaprov|Lender}} — as such the {{gmslaprov|Borrower}}’s failure is not necessarily evidence that your {{gmslaprov|Borrower}} is about to auger into the side of a hill.
 The same goes for the failure to return {{gmslaprov|Equivalent}} (non-cash) {{gmslaprov|Collateral}} under Paragraph {{gmslaprov|9.2}}. The {{gmslaprov|Lender}} has a self-help mechanism it can use to close out its market risk: a {{gmslaprov|buy-in}}.