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Template:M summ Equity Derivatives 12.6: Difference between revisions
Template:M summ Equity Derivatives 12.6 (view source)
Revision as of 16:24, 21 April 2022
, 21 April 2022→Hostile governmental action
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If these {{eqderivprov|Extraordinary Events}} ({{eqderivprov|Nationalization}}, {{eqderivprov|Insolvency}} and {{eqderivprov|Delisting}}) occur, the parties may elect to terminate (if they choose {{eqderivprov|Negotiated Close-out}}), or the transaction will automatically terminate (if {{eqderivprov|Cancellation and Payment (Extraordinary Events)}} or {{eqderivprov|Partial Cancellation and Payment (Extraordinary Events)}} are selected). | If these ''particular'' {{eqderivprov|Extraordinary Events}} ({{eqderivprov|Nationalization}}, {{eqderivprov|Insolvency}} and {{eqderivprov|Delisting}}) occur, the parties may elect to terminate (if they choose {{eqderivprov|Negotiated Close-out}}), or the transaction will automatically terminate (if {{eqderivprov|Cancellation and Payment (Extraordinary Events)}} or {{eqderivprov|Partial Cancellation and Payment (Extraordinary Events)}} are selected). | ||
* '''[[Cancellation and Payment (Extraordinary Events) - Equity Derivatives Provision|Cancellation and Payment]]''' means that on one of these {{eqderivprov|Extraordinary Events}} occurring, the trade is terminated immediately and valued by the {{eqderivprov|Calculation Agent}} or the {{eqderivprov|Determining Party}} (important to check who this is!). This gives certainty and would be important in the case of a delta-1 derivative exposure with no defined termination (or where the defined termination is extremely long-dated). | * '''[[Cancellation and Payment (Extraordinary Events) - Equity Derivatives Provision|Cancellation and Payment]]''' means that on one of these {{eqderivprov|Extraordinary Events}} occurring, the trade is terminated immediately and valued by the {{eqderivprov|Calculation Agent}} or the {{eqderivprov|Determining Party}} (important to check who this is!). This gives certainty and would be important in the case of a delta-1 derivative exposure with no defined termination (or where the defined termination is extremely long-dated). | ||
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Note that a {{eqderivprov|Delisting}} covers full cessation of trading but not a suspension of trading, even if indefinite. But in that case a {{eqderivprov|Hedging Disruption}} or - at a pinch - {{eqderivprov|Increased Cost of Hedging}} ought to get you home. | Note that a {{eqderivprov|Delisting}} covers full cessation of trading but not a suspension of trading, even if indefinite. But in that case a {{eqderivprov|Hedging Disruption}} or - at a pinch - {{eqderivprov|Increased Cost of Hedging}} ought to get you home. | ||
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