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===Interest and accruals=== | ===Interest and accruals=== | ||
While the definitions | While the definitions provide that the {{eqderivprov|Equity Amount Payer}} must manufacture {{eqderivprov|Dividend Amount}}s on the {{eqderivprov|Cash Settlement Payment Date}}, (typically at the end of a {{eqderivprov|Dividend Period}}) and therefore structures in a period between receipt of underlying and payment on the swap, the definitions do not provide for any interest accrual over that period. | ||
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In practice, users tend to “pay when paid”, settling {{eqderivprov|Dividend Amount}}s the business day following receipt on the underlying, notwithstanding the text of the {{eqdefs}}. No-one complains about this. Indeed, we imagine no-one is any the wiser. If you are anything like the [[JC]], you will quietly wonder why we bother negotiating contracts in the first place, if operations personnel are just going to ignore them in practice. If you are an operations person, you may quietly wonder exactly the same thing.<br> |