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Margin lock-up: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "{{a|pb|}}Notwithstanding all the apocalyptic rights I have given myself in our {{pbprov|prime brokerage agreement}}, I agree not to increase my initial...") |
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If the basic premise of a [[PB]] relationship is that the [[prime broker]]’s unilateral right to immediately raise [[Initial margin|margin]] means the [[prime broker]] can precipitate a [[failure to pay]]<ref>''or'' satisfactorily increase its margin buffer, which by any rational lights has to be a better outcome for all concerned than total [[close-out]], right?</ref> on any day, then economically that is all the [[prime broker]] should need. That margin raising right represents an evergreen termination right. It ought, you would think, render the other usual economic<ref>As opposed to nefarious behaviour [[Event of default|EOD]]s: breaching regulations, being subject to [[OFAC]] sanctions, taking the Lord’s name in vain etc.</ref> [[EOD]]s/[[ATE]]s ([[NAV trigger]]s, [[key person]] provisions) are somewhat moot. | If the basic premise of a [[PB]] relationship is that the [[prime broker]]’s unilateral right to immediately raise [[Initial margin|margin]] means the [[prime broker]] can precipitate a [[failure to pay]]<ref>''or'' satisfactorily increase its margin buffer, which by any rational lights has to be a better outcome for all concerned than total [[close-out]], right?</ref> on any day, then economically that is all the [[prime broker]] should need. That margin raising right represents an evergreen termination right. It ought, you would think, render the other usual economic<ref>As opposed to nefarious behaviour [[Event of default|EOD]]s: breaching regulations, being subject to [[OFAC]] sanctions, taking the Lord’s name in vain etc.</ref> [[EOD]]s/[[ATE]]s ([[NAV trigger]]s, [[key person]] provisions) are somewhat moot. | ||
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