Eric Geddes
Member
- Messages
- 81
- Likes
- 10
Below is an extract from IG Index's SB customer agreement. Has anyone had experience of a share suspension/insolvency (with any SB Co) while in a bet? I'm interested in the terms at para 4 and how this would be effected in money terms. It occurs to me that an "Up" bet could be very expensive - if over-leveraged.
29. Suspension and insolvency
(1) If at any time trading is suspended in any financial instrument that forms the
subject of a Bet, the Bet in question will also be Suspended from operation unless
we are able to continue to make prices for the Bet based on prices in a different but
related Underlying Market that is not suspended from trading. If Suspended, the
suspension price of the Bet unless re-valued by us as set out in this Term 29, for the
purposes of Margining and otherwise, will be the mid-price quoted by us at the time
of suspension.
(2) Irrespective of whether the Determination Date for the Bet passes and
irrespective of any Orders given by you, a Bet on a suspended financial instrument
will remain open but Suspended until either one of the following takes place:
(a) the suspension in the Underlying Market is terminated and trading
recommences, at which point the Suspension of your Bet will also cease and your
Bet will become tradable again. Following lifting of Suspension, any Orders that
are Attached to the Bet that have been triggered will be executed as soon as
is reasonable in the circumstances having regard to liquidity in the Underlying
Market and any hedging transactions that we have with third parties in order to
hedge our exposure to you. We cannot guarantee that Orders will be executed at
the first available Underlying Market price; or
(b) where the financial instrument is in respect of a company, that company
is delisted from the Underlying Market, goes into insolvency or is otherwise
dissolved, at which point your Bet will be dealt with in accordance with Terms
29(4) and 29(5).
(3) If you have Bet that becomes Suspended by operation of this Term, you will be
deemed to have requested that the Bet be rolled forward to the Determination Date
following the lifting of the Suspension or until your Bet is dealt with in accordance
with Terms 29(4) or 29(5) as applicable. When we roll a Bet under this clause, the price
at which we open your new Bet may be different to the price at which your original
Bet is closed (so as to reflect interest payable during the period of the new Bet).
(4) If a company, whose securities represents all or part of the subject-matter of your
Bet, goes into insolvency or is otherwise dissolved, the day on which the company
goes into insolvency or is otherwise dissolved will be the Determination Date of that
Bet and we will deal with your Bet as follows:
(a) If you have an Up Bet, the Closing Level of the Bet will be zero and on closing,
we will open a corresponding proceeds line on your account so that if the
company makes a distribution to shareholders, an amount equalling the eventual
distribution will be credited to your account.
(b) If you have a Down Bet, the Closing Level of the Bet will be zero and on
closing we will open a corresponding proceeds line on your account so that if
the company makes a distribution to shareholders, an amount equalling the
distribution will be debited to your account. We reserve the right to require you to
maintain Margin on this proceeds line, which could for the avoidance of doubt be
as much as the difference between the Suspension price and zero.
(5) If a company, whose securities represent all or part of the subject-matter of a Bet
is delisted from the Exchange to which the Bet relates, but at the time of delisting
such company has not gone into insolvency nor been dissolved, then we will take
such action as is fair having regard to all of the circumstances regarding the delisting
and any hedging transactions that we have with third parties as a result of your
Bet and where possible which reflects the treatment accorded to holders of the
underlying security. Without any limitation, examples of the action that we might
take are:
(a) closing the Bet at a Closing Level that is based on our fair and reasonable
assessment of the value of the Instrument to which the Bet relates;
(b) changing the Exchange to which the Bet refers (i.e. if the company in question
has delisted on the reference Exchange, but maintains or has obtained listing on
another Exchange, we may alter your Bet so that it refers to the second Exchange);
(c) maintaining the Suspension of the Bet until the company makes a distribution
to holders of the security in question, at which point we will reflect that
distribution on your Bet;
(d) closing the Bet and opening a proceeds line as set out in Term 29(4).
(6) We reserve the right at all times when your Bets are Suspended under Term 29(2)
to revalue such Bet at such price and/or to change the Deposit or Margin rate, in both
cases as we shall determine to be reasonable in the circumstances and to require
payment of Deposit or Margin accordingly.
29. Suspension and insolvency
(1) If at any time trading is suspended in any financial instrument that forms the
subject of a Bet, the Bet in question will also be Suspended from operation unless
we are able to continue to make prices for the Bet based on prices in a different but
related Underlying Market that is not suspended from trading. If Suspended, the
suspension price of the Bet unless re-valued by us as set out in this Term 29, for the
purposes of Margining and otherwise, will be the mid-price quoted by us at the time
of suspension.
(2) Irrespective of whether the Determination Date for the Bet passes and
irrespective of any Orders given by you, a Bet on a suspended financial instrument
will remain open but Suspended until either one of the following takes place:
(a) the suspension in the Underlying Market is terminated and trading
recommences, at which point the Suspension of your Bet will also cease and your
Bet will become tradable again. Following lifting of Suspension, any Orders that
are Attached to the Bet that have been triggered will be executed as soon as
is reasonable in the circumstances having regard to liquidity in the Underlying
Market and any hedging transactions that we have with third parties in order to
hedge our exposure to you. We cannot guarantee that Orders will be executed at
the first available Underlying Market price; or
(b) where the financial instrument is in respect of a company, that company
is delisted from the Underlying Market, goes into insolvency or is otherwise
dissolved, at which point your Bet will be dealt with in accordance with Terms
29(4) and 29(5).
(3) If you have Bet that becomes Suspended by operation of this Term, you will be
deemed to have requested that the Bet be rolled forward to the Determination Date
following the lifting of the Suspension or until your Bet is dealt with in accordance
with Terms 29(4) or 29(5) as applicable. When we roll a Bet under this clause, the price
at which we open your new Bet may be different to the price at which your original
Bet is closed (so as to reflect interest payable during the period of the new Bet).
(4) If a company, whose securities represents all or part of the subject-matter of your
Bet, goes into insolvency or is otherwise dissolved, the day on which the company
goes into insolvency or is otherwise dissolved will be the Determination Date of that
Bet and we will deal with your Bet as follows:
(a) If you have an Up Bet, the Closing Level of the Bet will be zero and on closing,
we will open a corresponding proceeds line on your account so that if the
company makes a distribution to shareholders, an amount equalling the eventual
distribution will be credited to your account.
(b) If you have a Down Bet, the Closing Level of the Bet will be zero and on
closing we will open a corresponding proceeds line on your account so that if
the company makes a distribution to shareholders, an amount equalling the
distribution will be debited to your account. We reserve the right to require you to
maintain Margin on this proceeds line, which could for the avoidance of doubt be
as much as the difference between the Suspension price and zero.
(5) If a company, whose securities represent all or part of the subject-matter of a Bet
is delisted from the Exchange to which the Bet relates, but at the time of delisting
such company has not gone into insolvency nor been dissolved, then we will take
such action as is fair having regard to all of the circumstances regarding the delisting
and any hedging transactions that we have with third parties as a result of your
Bet and where possible which reflects the treatment accorded to holders of the
underlying security. Without any limitation, examples of the action that we might
take are:
(a) closing the Bet at a Closing Level that is based on our fair and reasonable
assessment of the value of the Instrument to which the Bet relates;
(b) changing the Exchange to which the Bet refers (i.e. if the company in question
has delisted on the reference Exchange, but maintains or has obtained listing on
another Exchange, we may alter your Bet so that it refers to the second Exchange);
(c) maintaining the Suspension of the Bet until the company makes a distribution
to holders of the security in question, at which point we will reflect that
distribution on your Bet;
(d) closing the Bet and opening a proceeds line as set out in Term 29(4).
(6) We reserve the right at all times when your Bets are Suspended under Term 29(2)
to revalue such Bet at such price and/or to change the Deposit or Margin rate, in both
cases as we shall determine to be reasonable in the circumstances and to require
payment of Deposit or Margin accordingly.
Last edited:
