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Section 871(m) amendment - ISDA Provision: Difference between revisions
Section 871(m) amendment - ISDA Provision (view source)
Revision as of 20:00, 4 October 2018
, 4 October 2018→So does that mean I can bin all this hypothetical broker-dealer nonsense?
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===So does that mean I can bin all this [[hypothetical broker-dealer]] nonsense?=== | ===So does that mean I can bin all this [[hypothetical broker-dealer]] nonsense?=== | ||
[[There’s no bright line test]], obviously. | |||
Since [[871(m)]] means that {{tag|WHT}} is now applied on [[high-delta equity derivative]]s in the same way it applies to physical cash trades, the [[recharacterisation]] risk is surely less fraught now, isn’t it? do we really care whether the counterparty controls the hedge? Can we therefore get rid of that tiresome “[[hypothetical broker-dealer]]” language, which so mightily confuses many counterparties, and just reference the actual hedge liquidation price as the closing price of the derivative? | Since [[871(m)]] means that {{tag|WHT}} is now applied on [[high-delta equity derivative]]s in the same way it applies to physical cash trades, the [[recharacterisation]] risk is surely less fraught now, isn’t it? do we really care whether the counterparty controls the hedge? Can we therefore get rid of that tiresome “[[hypothetical broker-dealer]]” language, which so mightily confuses many counterparties, and just reference the actual hedge liquidation price as the closing price of the derivative? | ||