Increased Cost of Hedging - Equity Derivatives Provision: Difference between revisions

Increased Cost of Hedging - Equity Derivatives Provision (view source)

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Replaced content with "{{manual|DEQ|2002|12.9(a)(vi)|Definition of||medium}}"

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 {{manual|DEQ|2002|12.9(a)(vi)|Definition of||medium}}
-''Compare with {{eqderivprov|Increased Cost of Stock Borrow}}, the equivalent provision where the {{eqderivprov|Hedging Party}} is [[short]].
-Part of the famed “[[triple cocktail]]” of protections against unexpected problems hedging and risk managing {{isdaprov|Transaction}}s, together with {{eqderivprov|Hedging Disruption}} and {{eqderivprov|Change in Law}}. Note also references to {{eqderivprov|Hedging Party}}.
-===Excluding own credit deterioration===
-{{eqderivprov|Increased Cost of Hedging}} excludes costs a {{eqderivprov|Hedging Party}} incurs through the deterioration of its own credit — so it will tend to capture market wide cost increases, and exclude those that are personal to the {{eqderivprov|Hedging Party}}. Assiduous sell-side [[broker|brokers]] will try to cut out the “deterioration of own credit” wording. Muscular [[asset manager]]s will tell them where to go.
-{{triplecocktail}}
-{{sa}}
-*Consequences of an {{eqderivprov|Additional Disruption Event}} in particular {{eqderivprov|12.9(b)(vi)}}.
-{{ref}}