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Template:M summ GMSLA 8: Difference between revisions
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===Term=== | |||
[[8 - GMSLA Provision|Unless]] you’ve agreed it has some kind of term, {{gmslaprov|Loans}} are callable at will by either party. | [[8 - GMSLA Provision|Unless]] you’ve agreed it has some kind of term, {{gmslaprov|Loans}} are callable at will by either party. | ||
You do see [[term loan]]s in certain cases: “pre-borrows”, where an aspiring [[Short sell|short seller]] is expecting a stock to go illiquid and wants to have the security ready to sell when everyone is scrabbling around trying to find enough of the stuff to sell short, thereby avoiding buy-ins and so on — and also in [[agent lending]] world, where {{gmslaprov|Borrower}}s will want some medium term commitment (90 days or so) for trades where they [[upgrade transaction|upgrade]] their [[prime brokerage]] and [[margin loan]] inventory into high-credit quality assets they can give back to their own treasury departments. financial reporting rules may require these trades to have a minimum remaining tenor to get appropriate RWA treatment. | You do see [[term loan]]s in certain cases: “pre-borrows”, where an aspiring [[Short sell|short seller]] is expecting a stock to go illiquid and wants to have the security ready to sell when everyone is scrabbling around trying to find enough of the stuff to sell short, thereby avoiding buy-ins and so on — and also in [[agent lending]] world, where {{gmslaprov|Borrower}}s will want some medium term commitment (90 days or so) for trades where they [[upgrade transaction|upgrade]] their [[prime brokerage]] and [[margin loan]] inventory into high-credit quality assets they can give back to their own treasury departments. financial reporting rules may require these trades to have a minimum remaining tenor to get appropriate RWA treatment. | ||
===“{{gmslaprov|Equivalent}}”=== | |||
What if the {{gmslaprov|Securities}} have been cancelled, redeemed, or converted into something else? The elaborately defined adjective {{gmslaprov|Equivalent}} does a lot of work here: | |||
{{nuts|GMSLA|Equivalent}} | |||
But what if the [[issuer]] has gone bust? Here there may be little or no liquidity in the shares — they may well have been delisted, for example. | |||
Look here to the [[mini-closeout]] provisions, which are designed to cope with exactly this kind of settlement failure. | |||