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Delivery obligations to be reciprocal - GMSLA Provision: Difference between revisions
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Delivery obligations to be reciprocal - GMSLA Provision (view source)
Revision as of 13:09, 5 December 2013
, 5 December 2013→Commentary
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====Commentary==== | ====Commentary==== | ||
This provision allows a Counterparty to suspend payments or deliveries pending satisfactory arrangements where it is concerned as to the creditworthiness of its counterparty. | |||
Otherwise a creditworthy {{gmslaprov|Borrower}} would be obliged to redeliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} to a bankrupt {{gmslaprov|Lender}} even though it did not expect to receive its {{gmslaprov|Equivalent}} {{gmslaprov|Collateral}} back, which would prejudice its ability to effect a {{gmslaprov|mini close-out}} and set off its obligation to deliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} against that {{gmslaprov|Collateral}} return. | |||
====Related Provisions==== | ====Related Provisions==== | ||