Determination of Default Market Value - GMSLA Provision: Difference between revisions

Determination of Default Market Value - GMSLA Provision (view source)

736 bytes removed , 29 June 2015

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 {{nuts|gmsla|11.4}}
-Note that to determine a {{gmslaprov|Default Market Value}} the counterparty must '''sell''' (''not'' buy) securities equivalent to those it is expecting back from a {{gmslaprov|Non-Defaulting Party}}. This, we think, is to ensure that the price is "real": the temptation otherwise would be for the {{gmslaprov|Non-Defaulting Party}} to accept any old bid or offer, safe in the knowledge it can pass the cost on to the {{gmslaprov|Defaulting Party}}.
+{{buy-in}}
-Tricks to watch out for, especially in illiquid stocks, is that the {{gmslaprov|Non-Defaulting Party}} is not somehow influencing the price at which that innocent third party might transact (by agreeing to enter an offsetting transaction at the same time). That would be fraudulent, of course.
 ====See Also====
 {{gmslaanatomy}}