Template:Nutshell Equity Derivatives 12.9(b)(ii): Difference between revisions
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::{{eqderivprov|12.9(b)(ii)}} If “'''{{eqderivprov|Failure to Deliver}}'''” applies to a {{eqderivprov|Transaction}}, then | ::{{eqderivprov|12.9(b)(ii)}} If “'''{{eqderivprov|Failure to Deliver}}'''” applies to a {{eqderivprov|Transaction}}, then a {{eqderivprov|Failure to Deliver}} will not be an {{isdaprov|Event of Default}} but the “'''{{eqderivprov|Delivering Party}}'''” must: | ||
:::(A) notify the “'''{{eqderivprov|Receiving Party}}'''” that a {{eqderivprov|Failure to Deliver}} has occurred within one {{eqderivprov|Clearance System Business Day}} of the relevant {{eqderivprov|Exercise Date}} in the case of an {{eqderivprov|Option Transaction}} and at least one {{eqderivprov|Settlement Cycle}} prior to the {{eqderivprov|Settlement Date}} in the case of a {{eqderivprov|Forward Transaction}} or {{eqderivprov|Equity Swap Transaction}} and | :::(A) notify the “'''{{eqderivprov|Receiving Party}}'''” that a {{eqderivprov|Failure to Deliver}} has occurred within one {{eqderivprov|Clearance System Business Day}} of the relevant {{eqderivprov|Exercise Date}} in the case of an {{eqderivprov|Option Transaction}} and at least one {{eqderivprov|Settlement Cycle}} prior to the {{eqderivprov|Settlement Date}} in the case of a {{eqderivprov|Forward Transaction}} or {{eqderivprov|Equity Swap Transaction}} and | ||
:::(B) deliver to the {{eqderivprov|Receiving Party}} on the {{eqderivprov|Settlement Date}} those {{eqderivprov|Shares}} that it can deliver on such date; | :::(B) deliver to the {{eqderivprov|Receiving Party}} on the {{eqderivprov|Settlement Date}} those {{eqderivprov|Shares}} that it can deliver on such date; | ||
and the {{eqderivprov|Receiving Party}}’s corresponding payment or delivery obligation to the {{eqderivprov|Delivering Party}} will be proportionately reduced. | ::and the {{eqderivprov|Receiving Party}}’s corresponding payment or delivery obligation to the {{eqderivprov|Delivering Party}} will be proportionately reduced. | ||
'''For {{eqderivprov|European Option}}s and {{eqderivprov|Forward Transaction}}s''': The {{eqderivprov|Receiving Party}} may terminate the {{eqderivprov|Transaction}} effective immediately by notifying the {{eqderivprov|Delivering Party}} and must (as {{eqderivprov|Determining Party}}) determine the {{eqderivprov|Cancellation Amount}} (after consideration of any partial delivery). | ::'''For {{eqderivprov|European Option}}s and {{eqderivprov|Forward Transaction}}s''': The {{eqderivprov|Receiving Party}} may terminate the {{eqderivprov|Transaction}} effective immediately by notifying the {{eqderivprov|Delivering Party}} and must (as {{eqderivprov|Determining Party}}) determine the {{eqderivprov|Cancellation Amount}} (after consideration of any partial delivery). | ||
'''For {{eqderivprov|American Option}}s and {{eqderivprov|Bermuda Option}}s''': The {{eqderivprov|Receiving Party}} may terminate that part of the {{eqderivprov|Transaction}} comprising the exercised {{eqderivprov|Option}}s effective immediately by notifying the {{eqderivprov|Delivering Party}} and must (as {{eqderivprov|Determining Party}}) determine the {{eqderivprov|Cancellation Amount}} payable in relation to such terminated {{eqderivprov|Transaction}} (after consideration of any partial delivery). | ::'''For {{eqderivprov|American Option}}s and {{eqderivprov|Bermuda Option}}s''': The {{eqderivprov|Receiving Party}} may terminate that part of the {{eqderivprov|Transaction}} comprising the exercised {{eqderivprov|Option}}s effective immediately by notifying the {{eqderivprov|Delivering Party}} and must (as {{eqderivprov|Determining Party}}) determine the {{eqderivprov|Cancellation Amount}} payable in relation to such terminated {{eqderivprov|Transaction}} (after consideration of any partial delivery). | ||
'''For {{eqderivprov|Equity Swap Transaction}}s''': The {{eqderivprov|Receiving Party}} may terminate that part of the {{eqderivprov|Transaction}} consisting of the {{eqderivprov|Number of Shares to be Delivered}} or {{eqderivprov|Number of Baskets to be Delivered}} on that {{eqderivprov|Settlement Date}} effective immediately by notifying the {{eqderivprov|Delivering Party}} and must (as {{eqderivprov|Determining Party}} determine the {{eqderivprov|Cancellation Amount}} (after consideration of any partial delivery). | ::'''For {{eqderivprov|Equity Swap Transaction}}s''': The {{eqderivprov|Receiving Party}} may terminate that part of the {{eqderivprov|Transaction}} consisting of the {{eqderivprov|Number of Shares to be Delivered}} or {{eqderivprov|Number of Baskets to be Delivered}} on that {{eqderivprov|Settlement Date}} effective immediately by notifying the {{eqderivprov|Delivering Party}} and must (as {{eqderivprov|Determining Party}} determine the {{eqderivprov|Cancellation Amount}} (after consideration of any partial delivery). | ||
For unexercised {{eqderivprov|American Option}}s and {{eqderivprov|Bermuda Option}}s to which {{eqderivprov|Multiple Exercise}} applies, and for {{eqderivprov|Equity Swap Transaction}}s where a {{eqderivprov|Settlement Date}} has not occurred | ::'''For unexercised {{eqderivprov|American Option}}s and {{eqderivprov|Bermuda Option}}s to which {{eqderivprov|Multiple Exercise}} applies, and for {{eqderivprov|Equity Swap Transaction}}s where a {{eqderivprov|Settlement Date}} has not occurred''': The {{eqderivprov|Receiving Party}} may elect within one {{eqderivprov|Settlement Cycle}} of the {{eqderivprov|Settlement Date}} on which the {{eqderivprov|Transaction}} was partially terminated to terminate the remainder of the {{eqderivprov|Transaction}} upon two {{eqderivprov|Scheduled Trading Day}}s’ notice to the {{eqderivprov|Delivering Party}}, and the {{eqderivprov|Receiving Party}} must (as {{eqderivprov|Determining Party}}) determine the {{eqderivprov|Cancellation Amount}} for the terminated {{eqderivprov|Transaction}}. <br> | ||
Revision as of 17:13, 18 September 2019
- 12.9(b)(ii) If “Failure to Deliver” applies to a Transaction, then a Failure to Deliver will not be an Event of Default but the “Delivering Party” must:
- (A) notify the “Receiving Party” that a Failure to Deliver has occurred within one Clearance System Business Day of the relevant Exercise Date in the case of an Option Transaction and at least one Settlement Cycle prior to the Settlement Date in the case of a Forward Transaction or Equity Swap Transaction and
- (B) deliver to the Receiving Party on the Settlement Date those Shares that it can deliver on such date;
- and the Receiving Party’s corresponding payment or delivery obligation to the Delivering Party will be proportionately reduced.
- 12.9(b)(ii) If “Failure to Deliver” applies to a Transaction, then a Failure to Deliver will not be an Event of Default but the “Delivering Party” must:
- For European Options and Forward Transactions: The Receiving Party may terminate the Transaction effective immediately by notifying the Delivering Party and must (as Determining Party) determine the Cancellation Amount (after consideration of any partial delivery).
- For American Options and Bermuda Options: The Receiving Party may terminate that part of the Transaction comprising the exercised Options effective immediately by notifying the Delivering Party and must (as Determining Party) determine the Cancellation Amount payable in relation to such terminated Transaction (after consideration of any partial delivery).
- For Equity Swap Transactions: The Receiving Party may terminate that part of the Transaction consisting of the Number of Shares to be Delivered or Number of Baskets to be Delivered on that Settlement Date effective immediately by notifying the Delivering Party and must (as Determining Party determine the Cancellation Amount (after consideration of any partial delivery).
- For unexercised American Options and Bermuda Options to which Multiple Exercise applies, and for Equity Swap Transactions where a Settlement Date has not occurred: The Receiving Party may elect within one Settlement Cycle of the Settlement Date on which the Transaction was partially terminated to terminate the remainder of the Transaction upon two Scheduled Trading Days’ notice to the Delivering Party, and the Receiving Party must (as Determining Party) determine the Cancellation Amount for the terminated Transaction.
- For unexercised American Options and Bermuda Options to which Multiple Exercise applies, and for Equity Swap Transactions where a Settlement Date has not occurred: The Receiving Party may elect within one Settlement Cycle of the Settlement Date on which the Transaction was partially terminated to terminate the remainder of the Transaction upon two Scheduled Trading Days’ notice to the Delivering Party, and the Receiving Party must (as Determining Party) determine the Cancellation Amount for the terminated Transaction.