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*'''Not fungible''': Securities from different series, even if issued by the same issuer, are ''not'' fungible with each other. | *'''Not fungible''': Securities from different series, even if issued by the same issuer, are ''not'' fungible with each other. | ||
*'''Fungible''': Individual securities comprising part of a single series (and having a the same [[ISIN]] ''are'' fungible with each other. | *'''Fungible''': Individual securities comprising part of a single series (and having a the same [[ISIN]] ''are'' fungible with each other. | ||
There is a great divide in the bedeviling pedantry of law, the between things that are the ''same'' but somehow ''different'', and things that are ''different'' but nonetheless precisely the same. [[Amend]]ment describes that first class; [[fungibility]] the second. | |||
===Definition=== | ===Definition=== | ||
Assets are fungible where their nature allows them to be replaced in whole or in part with other assets of a like nature. However, it applies only to the equivalence of each unit of a commodity with other units of the same commodity. Fungibility does not describe or relate to any exchange of one commodity for some other, different commodity. | Assets are fungible where their nature allows them to be replaced in whole or in part with other assets of a like nature. However, it applies only to the equivalence of each unit of a commodity with other units of the same commodity. Fungibility does not describe or relate to any exchange of one commodity for some other, different commodity. | ||
====Examples==== | ====Examples==== | ||
For example shares in a company can be described as fungible as you can replace those shares with other [[equivalent]] shares in the same company. However, shares of an “equivalent” value in another company would not be considered a valid replacement. | For example shares in a company can be described as fungible as you can replace those shares with other [[equivalent]] shares in the same company. However, shares of an “equivalent” value in another company would not be considered a valid replacement. | ||
Money can also be considered a fungible asset. If you borrow £10 from someone, you do not need to give the same £10 note back. You could give that person another £10 note, or two £5 notes, or any combination of coins that add up to £10 (as long as they are happy to accept that many coppers!) | Money can also be considered a fungible asset. If you borrow £10 from someone, you do not need to give the same £10 note back. You could give that person another £10 note, or two £5 notes, or any combination of coins that add up to £10 (as long as they are happy to accept that many coppers!) | ||
===“[[Equivalent]]” and “[[fungible]]”: ''la même chose''=== | ===“[[Equivalent]]” and “[[fungible]]”: ''la même chose''=== | ||
Note: in financial markets speak, “[[equivalent]]” means ''[[fungible]]''. It doesn’t mean “somewhat like". Go see our “[[equivalent]]” article for more. | Note: in financial markets speak, “[[equivalent]]” means ''[[fungible]]''. It doesn’t mean “somewhat like". Go see our “[[equivalent]]” article for more. | ||
{{sa}} | {{sa}} | ||
*[[Amendment]] | |||
*[[Equivalent]] | *[[Equivalent]] | ||
*[[Deem]]ing | |||
*[[True sale opinion]] | *[[True sale opinion]] | ||