Template:Nutshell Equity Derivatives 12.9(b)(ii): Difference between revisions

::{{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  

:::(B) deliver to the {{eqderivprov|Receiving Party}} on the {{eqderivprov|Settlement Date}} those {{eqderivprov|Shares}} that it can deliver on such date;  

 

::'''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|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''': 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>