Failure to pay Collateral - GMSLA Provision: Difference between revisions

But this may not be an accident, for the same reason a failure to redeliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} isn't an {{gmslaprov|Event of Default}}. Indeed, it looks like a plainly deliberate omission. The drafters were careful to capture the payment or repayment of cash, and deliveries and ''further'' deliveries of Collateral, but not the return of Equivalent Collateral.  

A counterparty may have on-lent, or on-collateralised, with non-cash {{gmslaprov|Collateral}} it has been posted. It may have exactly the same difficulties in getting hold of it to redeliver as a borrower may in getting hold of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}}. So the rememedy is to withhold the return of securities, buy in and mini-close out under 9.2 which gives the aggrieved party equivalent rights, but not the right to close out the whole agreement (until there's a failure of the mini-close out settlement amount itself).