Distributions and Corporate Actions - GMSLA Provision: Difference between revisions

Distributions and Corporate Actions - GMSLA Provision (view source)

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 There is a slight tension between {{gmslaprov|6.5}} and {{gmslaprov|6.6}}: while a Borrower is not obliged to vote in a certain way, if it does so and acquires a certain benefit ''and the Lender requests'', it has to pass over that benefit. Best illustrated by way of example:
-{{box|Under {{isdaprov|Italian Law}} a [[shareholder]] on the [[Record Date]] who does not vote in favour of a proposed {{tag|merger}} acquires a "''[[withdrawal right|Withdrawal right - Italian Corporate Law]]''" if the {{tag|merger}} is approved. The withdrawal right allows a shareholder who abstained or voted against the merger to be cashed out of the equity at a pre-defined price (the weighted average of the closing price of the stock over the last six months).
+{{box|{{italianwithdrawalright}}
-It is therefore possible that the withdrawal right as a {{tag|call option}} over the stock. It is only exercisable if the shareholder does not vote.}}
 In this case the {{gmslaprov|Lender}} who has lent out over the [[record date]] could not (without prior agreement) oblige the {{gmslaprov|Borrower}} to vote against the {{tag|merger}}, but if the {{gmslaprov|Borrower}} has done so, the {{gmslaprov|Lender}} can, by request under {{gmslaprov|6.7}}, require the {{gmslaprov|Borrower}} to deliver the proceeds of the withdrawal in lieu of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}}.
 {{gmslaanatomy}}