83,492
edits
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
Line 6: | Line 6: | ||
Now what might happen under a [[total return swap]] if such a {{eqderivprov|Potential Adjustment Event}} happens retrospectively, after a Transaction has been terminated (or has matured)? This does happen from time to time. For example: | Now what might happen under a [[total return swap]] if such a {{eqderivprov|Potential Adjustment Event}} happens retrospectively, after a Transaction has been terminated (or has matured)? This does happen from time to time. For example: | ||
:''A total return swap transaction is traded on 1 January. It matures and is settled on 1 June. On 1 September, following an accounting error coming to light, the Issuer declares | :''A total return swap transaction is traded on 1 January. It matures and is settled on 1 June. On 1 September, following an accounting error coming to light, the Issuer declares a bonus share issue to all holders of record on 1 March. which it pays out on 1 December. | ||
First thing: just because the {{isdaprov|Transaction}} has passed its term, doesn't mean it winks out of existence, white rabbits and no returns. Payment obligations which were due under the term remain due and payable afterward - see the commentary to {{isdadefsprov|Termination Date}} in the [[2006 ISDA Definitions]]. | First thing: just because the {{isdaprov|Transaction}} has passed its term, doesn't mean it winks out of existence, white rabbits and no returns. Payment obligations which were due under the term remain due and payable afterward - see the commentary to {{isdadefsprov|Termination Date}} in the [[2006 ISDA Definitions]]. |