Loss of Stock Borrow - Equity Derivatives Provision: Difference between revisions

*If the cost of a stock borrow exceeds the {{gmslaprov|Maximum Stock Loan Rate}} it is deemed to be (as good as) impossible to borrow stock, so it is treated as a {{gmslaprov|Loss of Stock Borrow}}, not merely an {{gmslaprov|Increased Cost of Stock Borrow}}. If a counterparty wants to apply Increased Cost of Stock Borrow whatever the cost of an available bid, the answer is to disapply {{gmslaprov|Maximum Stock Loan Rate}} altogether. This means that ''any'' possible stock borrow rate, however astronomical, comes under {{gmslaprov|Increased Cost of Stock Borrow}}, and {{gmslaprov|Loss of Stock Borrow}} (which is slightly more onerous a termination right) only applies where there are no offers in the market at all.