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Events of Default - GMRA Provision: Difference between revisions
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Events of Default - GMRA Provision (view source)
Revision as of 13:15, 21 February 2018
, 21 February 2018→A sensible approach?
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===A sensible approach?=== | ===A sensible approach?=== | ||
Some scholars—okay: one - and no it isn't the [[Jolly Contrarian]] although he does get the point—have intimated that the {{1995gmra}} got this right and the {{2000gmra}} got it wrong. For the following reasons: | |||
*'''Initiation''': A delivery failure by a {{gmraprov|Lender}} when initiating a repo has no consequence – it is neither an Event of Default, nor a breach of contract. Section {{gmraprov|10(g)}} allows the {{gmraprov|Buyer}} to terminate the repo at any time while the delivery failure is continuing ''or'' to work with the {{gmraprov|Seller}} to initiate the repo on a later date. | *'''Initiation''': A delivery failure by a {{gmraprov|Lender}} when initiating a repo has no consequence – it is neither an Event of Default, nor a breach of contract. Section {{gmraprov|10(g)}} allows the {{gmraprov|Buyer}} to terminate the repo at any time while the delivery failure is continuing ''or'' to work with the {{gmraprov|Seller}} to initiate the repo on a later date. | ||
*'''Scheduled maturity''': A redelivery failure by a {{gmraprov|Borrower}} at term is not an {{gmraprov|Event of Default}}. Rather, the {{gmraprov|Lender}} may [[buy in]] the securities using section {{gmraprov|10(h)}}. | *'''Scheduled maturity''': A redelivery failure by a {{gmraprov|Borrower}} at term is not an {{gmraprov|Event of Default}}. Rather, the {{gmraprov|Lender}} may [[buy in]] the securities using section {{gmraprov|10(h)}}. | ||