82,891
edits
Template:M gen GMSLA 10: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) (Created page with "{{gmslaprov|10.1(a)}}: <br> {{gmslaprov|10.1(b)}}: <br> {{gmslaprov|10.1(c)}}: <br> {{gmslaprov|10.1(d)}}: <br> {{gmslaprov|10.1(e)}}: Breach of Warranty: Why exclude the 14(e...") |
Amwelladmin (talk | contribs) No edit summary |
||
| (4 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
{{gmslaprov|10.1(a)}}: | ==={{gmslaprov|10.1(a)}}: Failure to pay or deliver=== | ||
{{gmslaprov|10.1(b)}}: <br> | {{failure to pay under GMSLA}} | ||
{{gmslaprov|10.1(c)}} | [[Events of Default - GMSLA Provision|There]] are great tales of worthy fellows around the market trying to tweak this provision because, by apparent oversight, it doesn't capture a failure to ''return'' {{gmslaprov|Equivalent}} (non cash) {{gmslaprov|Collateral}}. | ||
{{gmslaprov|10.1(d)}} | |||
{{gmslaprov|10.1(e)}}: Breach of | But this is not an accident, for the same reason a failure to redeliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} isn’t an {{gmslaprov|Event of Default}}. Indeed, it is a plainly deliberate omission. The drafters were careful to capture the payment or repayment of cash, and deliveries and ''further'' deliveries of {{gmslaprov|Collateral}}, but not the return of ''{{gmslaprov|Equivalent}}'' {{gmslaprov|Collateral}}. | ||
{{gmslaprov|10.1(f)}} | |||
{{gmslaprov|10.1(g)}} | A counterparty may have on-lent, or on-collateralised, with non-cash {{gmslaprov|Collateral}} it has been posted. It may have exactly the same difficulties in getting hold of it to redeliver as a borrower may in getting hold of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}}. So the remedy is to withhold the return of securities, buy in and {{isdaprov|mini close-out}} under {{gmslaprov|9.2}} which gives the aggrieved party equivalent rights, but not the right to close out the whole agreement (until there’s a failure of the mini-close out settlement amount itself). | ||
{{gmslaprov|10.1(h)}} | |||
{{gmslaprov|10.1(i)}} | ==={{gmslaprov|10.1(b)}}: Unremedied failure to manufacture Income=== | ||
Note the [[tedious]] back and forth of notices here. | |||
*First, the Income has to be due under the {{gmslaprov|Collateral}} or {{gmslaprov|Loaned Securities}}. | |||
*Then the person obliged under Paragraph {{gmslaprov|6}} to [[manufacture]] the {{gmslaprov|Income}} back has to fail to do so, on that due date. | |||
*Then the aggrieved party has to tell the delinquent one — note: it is not yet technically a “{{gmslaprov|Defaulting Party}}” as there is a [[grace period]] — that it has failed to make that payment, and ask it to make the payment within three {{gmslaprov|Business Day}}s. | |||
*Then the delinquent party has to fail to remediate the manifactured {{gmslaprov|Income}} payment by close on the third {{gmslaprov|Business Day}} after that notice. Then the aggreived party can notify the delinquent party — whereupon it becomes a “{{gmslaprov|Defaulting Party}}” — that it is, finally, an {{gmslaprov|Event of Default}}.<br> | |||
==={{gmslaprov|10.1(c)}} Minicloseout failure=== | |||
See commentary above under {{gmslaprov|10.1(a)}}. | |||
==={{gmslaprov|10.1(d)}} {{gmslaprov|Act of Insolvency}}=== | |||
For which you will need the definition of {{gmslaprov|Act of Insolvency}}, which is not quite the same as the definition of {{isdaprov|Bankruptcy}} in the {{isdama}}. I suspect this was just a matter of professional pride for {{islacds}}, and its [[ninja]] forebears when they crafted the [[Act of Insolvency - OSLA Provision|equivalent provision]] in the {{osla}}, on which this provision is based | |||
==={{gmslaprov|10.1(e)}}: Breach of warranty=== | |||
Why exclude the 14(e) warranty about not having the primary purpose of voting on the Securities? Search me. <br> | |||
==={{gmslaprov|10.1(f)}}=== | |||
==={{gmslaprov|10.1(g)}}=== | |||
==={{gmslaprov|10.1(h)}}=== | |||
==={{gmslaprov|10.1(i)}}=== | |||