Forward Transaction - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions
A Jolly Contrarian owner’s manual™

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Section 1.3 in a Nutshell

Use at your own risk, campers!
1.3. A “Forward Transaction” means an OTC equity forward transaction:
(a) on a single index (an “Index Forward Transaction”);
(b) on a single security (a “Share Forward Transaction”);
(c) on a basket of indices (an “Index Basket Forward Transaction); or
(d) on a basket of securities (a “Share Basket Forward Transaction”).

Full text of Section 1.3

Section 1.3. Forward Transaction. “Forward Transaction” means a transaction that is (a) an OTC equity forward transaction relating to a single index (an “Index Forward Transaction”), (b) an OTC equity forward transaction relating to a single share or other security (a “Share Forward Transaction”), (c) an OTC equity forward transaction relating to a basket of indices (an “Index Basket Forward Transaction”) or (d) an OTC equity forward transaction relating to a basket of shares or other securities (a “Share Basket Forward Transaction”).


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Content and comparisons

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Summary

Section 1.3 Forward Transactions

We have a fair bit of information about forward transactions generally in our article on forward sales. This is, on one hard, merely an over-the-counter version of a futures contract, but on another is a fairly important component in asset financing, repurchase and securities lending — all of which are unglamorous, but yet fundamental, components of the plumbing of the financial system.

The older the JC has got, the more important boring old asset financing has seemed.

General discussion

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See also

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References