Template:M summ Equity Derivatives 1.26

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Related Exchange is relevant to Market Disruption Event. See also the related definition at “Exchange”.

In each case, the relevant Related Exchange will be specified in the Confirmation — the standard tends to be “All Exchanges”), and these are exchanges on which “trading in futures or options contracts relating to such Index or such Share” takes place.

Section 1.26 could have done with clearer punctuation in our humble view, but our best guess is that you determine the Related Exchange as follows:

  • each “Related Exchange” so specified in the Confirmation — this could be in theory be an options exchange or a stock exchange, but for reasons set out below, we think it is meant to only be a futures or options exchange;
  • any successor to those specified Related Exchanges, (also could be either, but) or
  • any substitute exchange to the above to which trading in futures or options on the Index/Share has temporarily relocated, unless
  • the Confirm specifies “All Exchanges”, in which case “Related Exchange” means all exchange or quotation systems that material effect the overall market for futures or options on the Index/Share.

Now you tell me, but this looks like an attempt to limit “Related Exchanges” to options and futures exchanges, and leave stock exchanges to the definition of regular “Exchange”s. This is corroborated by the fact that Settlement Cycle, Settlement Price and Final Price which are relevant to delivering and valuing Shares, only references “Exchanges”, not “Related Exchanges”, and most of the references to Related Exchanges in the defintions relate to the pricing of forwards and options — In-the-Moneyness of Calls and Puts, Trading Disruptions on options and futures, and in the related definition of Options Exchange, which definitely is meant to be an, um, Options Exchange.

Then again, there is a definition of Options Exchange: what the necessary difference is between a Related Exchange and Options Exchange, we have not quite yet nutted out. Do write in if you have any ideas.

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