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Template:M summ Equity Derivatives 12.9(a)(ii): Difference between revisions
Template:M summ Equity Derivatives 12.9(a)(ii) (view source)
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For those inclined to look even gift horses in the mouth, this provision may appear to leave some things unsaid. | For those inclined to look even gift horses in the mouth, this provision may appear to leave some things unsaid. | ||
====Some ''other'' way of holding {{eqderivprov|Shares}}=== | ====Some ''other'' way of holding {{eqderivprov|Shares}}==== | ||
What if it has become illegal to hold {{eqderivprov|Shares}} ''the way the {{eqderivprov|Hedging Party}} is holding them'', but it remains legal to hold them some ''other'' way? For example, if Shares needed to be listed on a certain {{eqderivprov|Exchange}}, or cleared across a certain clearinghouse? At first blush this seems fanciful but before you laugh don’t forget this was one of the potential consequences of [[Brexit means Brexit|Brexit]] — and for the Swissies — when the EU share trading obligation row blew up in 2019. | What if it has become illegal to hold {{eqderivprov|Shares}} ''the way the {{eqderivprov|Hedging Party}} is holding them'', but it remains legal to hold them some ''other'' way? For example, if Shares needed to be listed on a certain {{eqderivprov|Exchange}}, or cleared across a certain clearinghouse? At first blush this seems fanciful but before you laugh don’t forget this was one of the potential consequences of [[Brexit means Brexit|Brexit]] — and for the Swissies — when the EU share trading obligation row blew up in 2019. | ||
Even leaving aside the direction that one must act in [[good faith]] in arriving at one’s conclusion, it is hard to see how one could say it was “''illegal'' to hold Shares” if in fact one ''could'' legally hold those {{eqderivprov|Shares}} some other way. So this one’s a bit silly. | Even leaving aside the direction that one must act in [[good faith]] in arriving at one’s conclusion, it is hard to see how one could say it was “''illegal'' to hold Shares” if in fact one ''could'' legally hold those {{eqderivprov|Shares}} some other way. So this one’s a bit silly. | ||
====''Other'' hedges, without {{eqderivprov|Shares}}, still possible=== | ====''Other'' hedges, without {{eqderivprov|Shares}}, still possible==== | ||
What if one could [[hedge]] via [[futures]], [[derivatives]], [[GDR]]s or some other instrument without significant extra cost or inconvenience? Would that still count as a Change in Law, just because you couldn't hedge with actual {{eqderivprov|Shares}}? | What if one could [[hedge]] via [[futures]], [[derivatives]], [[GDR]]s or some other instrument without significant extra cost or inconvenience? Would that still count as a {{eqderivprov|Change in Law}}, just because you couldn't hedge with actual {{eqderivprov|Shares}}? | ||
But is “hold, acquire or dispose of {{eqderivprov|Shares}} relating to such {{eqderivprov|Transaction}}” too narrow when a {{eqderivprov|Hedging Party}} may be able to hedge some other way (i.e., via [[futures]], [[swaps]], [[depositary receipts]] and so on)? | But is “hold, acquire or dispose of {{eqderivprov|Shares}} relating to such {{eqderivprov|Transaction}}” too narrow when a {{eqderivprov|Hedging Party}} may be able to hedge some other way (i.e., via [[futures]], [[swaps]], [[depositary receipts]] and so on)? | ||