Delivery obligations to be reciprocal - GMSLA Provision: Difference between revisions

Delivery obligations to be reciprocal - GMSLA Provision (view source)

992 bytes removed , 7 July 2020

Replaced content with "{{gmslaanat|8.6}} {{sa}} *Flawed asset *Section {{isdaprov|2(a)(iii)}} of the {{isdama}}"

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 {{gmslaanat|8.6}}
-This provision allows a Counterparty to suspend payments or deliveries pending satisfactory arrangements where it is concerned as to the creditworthiness of its counterparty. It is a half-arsed version of the {{isdama}}’s feted Section {{isdaprov|2(a)(iii)}}.
-Otherwise a creditworthy {{gmslaprov|Borrower}} would be obliged to redeliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} to a bankrupt {{gmslaprov|Lender}} even though it did not expect to receive its {{gmslaprov|Equivalent}} {{gmslaprov|Collateral}} back, which would prejudice its ability to effect a {{gmslaprov|mini close-out}} and set off its obligation to deliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} against that {{gmslaprov|Collateral}} return.
-It's kind of weird, loosey goosey language:
-:“If I think you're bust and I don't want to pay, I don't have to, unless I couldn't pay or didn't want to pay, in which case I have to pay.”
-Consult the circular logicians to pick your way out of that one.
 {{sa}}
 *[[Flawed asset]]
 *Section {{isdaprov|2(a)(iii)}} of the {{isdama}}