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Income - GMSLA Provision: Difference between revisions
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{{gmslaanat|Income}} | {{gmslaanat|Income}} | ||
===Kinda wide, no?=== | |||
Not so much. | |||
*“'''[[with respect to]]'''” is not the greatest choice of words: it is far too mealy-mouthed, but what it means — what it can ''only'' mean is “'''[[under]]'''”. In the context of [[securities lending]] this ''must'' mean ''payments made under the terms of the instruments themselves''. That is, payments made by the [[issuer]], and to shareholders ''[[qua]]'' shareholders as a pure function of their [[ownership]] of the {{gmslaprov|securities}}. Such payments are restricted to {{gmslaprov|dividend}}s and {{gmslaprov|dividend}}-like payments: rewards to the shareholder for the prudent management and healthy profitability of the company in general. | |||
*“'''any {{gmslaprov|Securities}}'''”: It is implicit also that the distributions contemplated by paragraph {{gmslaprov|6.2}} should be available [[pari passu]] to all shareholders of the same class that is subject to the [[stock loan]]. This we can derive from the expression “…with respect to ''any'' {{gmslaprov|Securities}}” . The distribution ''must'' be with respect to any Securities, ''not just some of them''. The contract cannot function otherwise, for it would be impossible to determine ''which'' distribution would be required to be [[Manufactured payments in respect of Loaned Securities - GMSLA Provision|manufactured]] under the [[stock loan]]. The {{gmslaprov|Securities}} actually delivered to the {{gmslaprov|Borrower}} are no more determinative than any others, for, the basic premise of a stock loan is to facilitate a [[short sale]]: it should be in no-one’s contemplation that the {{gmslaprov|Borrower}} would hold any borrowed {{gmslaprov|Securities}} in [[inventory]]. | |||
*“…other {{gmslaprov|distribution}}s [[Any type, kind or nature|of any kind whatsoever]]” Under [[Ejusdem generis|general rules of contractual interpretation]] under English law, wherever general words follow specific words, the general words should be read to include only objects similar in nature to those specific words. So, “other distributions of any kind whatsoever” is to be read as subject to preceding words “dividends, interests” to mean, effectively, “any ''dividend-like or interest-like'' distributions of any kind whatsoever”. This interpretation is supported by the text of the UK Tax Addendum, which relates exclusively to dividend withholding, refers to ''any'' payment made under Clause {{gmslaprov|6.2}}, not just dividend-like ones. | |||
==={{gmslaprov|Income}} versus {{gmslaprov|Corporate action}}s=== | |||
So the question is how this dovetails into the [[Manufactured payments in respect of Loaned Securities - GMSLA Provision|manufactured income]] provisions where the {{gmslaprov|Income}} in question is in some way contingent on a [[corporate action]], vote, or shareholding status. | So the question is how this dovetails into the [[Manufactured payments in respect of Loaned Securities - GMSLA Provision|manufactured income]] provisions where the {{gmslaprov|Income}} in question is in some way contingent on a [[corporate action]], vote, or shareholding status. | ||