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Equivalent - GMSLA Provision: Difference between revisions
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{{gmslaanat|Equivalent}} | {{gmslaanat|Equivalent}} | ||
Notice under {{gmslaprov|6.7}} is the notice required to participate in a corporate action. | “{{gmslaprov|Notice}}” under {{gmslaprov|6.7}} is the notice required to participate in a [[corporate action]]. | ||
This is a beast of a provision to parse. What I think it means in summary is set out in the panel to the right. | |||
The reason for that is that a stock loan is a [[title transfer arrangement]]: since you are free to do with the stock I gave you as you please, you can (and probably will) sell it to someone else. So I can't very well expect you to give exactly the same item back to me. [[2.3 - GMSLA Provision|It's not a loan, after all]]. And actually if I were able to ask for the same item back, it would interfere with the legal characterisation of our {{tag|stock loan}} as a {{tag|title transfer}} arrangement. | The key thing to observe is that “{{tag|equivalent}}" doesn't mean “similar" or “somewhat like the thing I gave you". It means THE EXACT SAME THING. Same [[cusip]]; same [[isin]]. Fully [[fungible]]. Nothing else will do. The only distinction that “[[equivalent]]" permits is that the security does not have to be the precise security, down to the individual certificate number<ref>i.e., if it where a security-printed physical certificat form which, in these enlightened, electronic, dematerialised times, it simply won't be.</ref>, that I gave you, as long as it is identical to and [[fungible]] with it. | ||
The reason for that is that a [[stock loan]] is a [[title transfer arrangement]]: since you are free to do with the stock I gave you as you please, you can (and probably will) sell it to someone else. So I can't very well expect you to give exactly the same item back to me. [[2.3 - GMSLA Provision|It's not a loan, after all]]. And actually if I were able to ask for the same item back, it would interfere with the legal characterisation of our {{tag|stock loan}} as a {{tag|title transfer}} arrangement. | |||
===GMSLA Equivalence=== | ===GMSLA Equivalence=== | ||
{{gmsla equivalence}} | {{gmsla equivalence}} | ||
{{ | {{sa}} | ||
*[[Fungible]] | |||
*{{gmraprov|Equivalent}} in the {{gmra}} | *{{gmraprov|Equivalent}} in the {{gmra}} | ||