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Equivalent - GMSLA Provision: Difference between revisions
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::(iv) are subject to an event similar to any of the foregoing events it means, Securities fungible with the securities in question, together with (or if the context requires replaced by) a cash amount or securities fungible with those received by the holder in connection with the event; <br> | ::(iv) are subject to an event similar to any of the foregoing events it means, Securities fungible with the securities in question, together with (or if the context requires replaced by) a cash amount or securities fungible with those received by the holder in connection with the event; <br> | ||
}} | }} | ||
the key thing to observe is that "{{tag|equivalent}}" doesn't mean "of a similar type" or "broadly somewhat like the thing I gave you". It means THE EXACT SAME THING. Same [[cusip]]; same [[isin]]. 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 certificate number, 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. | |||
====See Also==== | ====See Also==== | ||
{{gmslaanatomy}} | {{gmslaanatomy}} | ||