Distributions and Corporate Actions - GMSLA Provision: Difference between revisions

Distributions and Corporate Actions - GMSLA Provision (view source)

Revision as of 11:11, 2 July 2013

1,633 bytes added , 2 July 2013

no edit summary

Amwelladmin

Bureaucrats, Interface administrators, Administrators

82,891

edits

@@ Line 1: / Line 1: @@
 {{2010 GMSLA Section 6 TOC}}
+This section deals with the rights of parties with regard to "their" Securities and Collateral while it is "out on loan". In a nutshell:
+*Under {{gmslaprov|6.2}} a {{gmslaprov|Borrower}} of {{gmslaprov|Securities}} must "manufacture" payments equal to {{gmslaprov|Income}} received on those {{gmslaprov|Securities}} and pay it to the {{gmslaprov|Lender}};
+*Under {{gmslaprov|6.3}} a {{gmslaprov|Lender}} holding {{gmslaprov|Non Cash Collateral}} for a {{gmslaprov|Loan}} must "manufacture" payments equal to {{gmslaprov|Income}} received on that {{gmslaprov|Collateral}} and pay it to the {{gmslaprov|Borrower}};
+*Under {{gmslaprov|6.4}} the {{gmslaprov|Lender}} indemnifies the {{gmslaprov|Borrower}} for failing to redeliver {{gmslaprov|Equivalent}} {{gmslaprov|Non Cash Collateral}};
+*Under {{gmslaprov|6.5}} {{gmslaprov|Income}} in the form of {{gmslaprov|Securities}} are rolled up into the {{gmslaprov|Loan}} and not redelivered immediately;
+*Under {{gmslaprov|6.5}} unless otherwise required, a {{gmslaprov|Borrower}} is NOT obliged to vote shares on behalf of the Lender;
+*Under {{gmslaprov|6.6}}, however, where a {{gmslaprov|Borrower}} acquires rights as a result of any corporate action or takeover activity, (including those requiring specific elections), upon Lender's request borrower must return Equivalent Securities or Collateral "in such form as would arise is exercised".
+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.
 {{gmslaanatomy}}