IP completion day and Make whole clause: Difference between pages

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imported>Doug Williamson
(Update for UK ratification.)
 
imported>Doug Williamson
(Link with Clause page.)
 
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''UK - European Union (EU) - Brexit.''
''US - securities''  


IP completion day was 31 December 2020.
A strong form of protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors.


IP completion day is an abbreviation for 'Implementation Period' completion day, the ending of the 11-month period from 31 January 2020 during which the UK continued to be subject to EU rules.
Under a make whole clause the borrower/issuer has to value the cash flows beyond the date of the early call/redemption at the US government bond yield.


This potentially makes it prohibitively expensive for the issuer to take an early redemption.


(This period was known in the Withdrawal Agreement between the UK and the EU as the 'transition period'.)
The consequence of a make whole clause for the investor is that they can re-invest the redemption monies in US government stock, thus preserving their originally expected cash inflows at lower risk.




On 24 December 2020 the UK and European Commission agreed the terms of a post-Brexit free trade agreement agreement that came into provisional application - subject to ratification by the EU - from 1 January 2021.
Make whole clauses are similar in their effect to Spens clauses.




== See also ==
== See also ==
* [[Article 50]]
* [[Call risk]]
* [[Brexit]]
* [[Clause]]
* [[Brexit Day]]
* [[Security]]
* [[Brexit transition period]]
* [[Spens clause]]
* [[Brexodus]]
* [[EU 27]]
* [[European Commission]]
* [[European Union]]
* [[European Union (Withdrawal Agreement) Act 2020]]
* [[Exit day]]
* [[Free trade agreement]]
* [[Make UK]]
* [[No Brexit]]
* [[No Deal]]
* [[Parliamentary supremacy]]
* [[Ratification]]
* [[Sovereignty]]
* [[United Kingdom]]
* [[Withdrawal Agreement]]
 
 
=== Other links ===
 
[https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7960 Brexit timeline - House of Commons Library]
 
[https://www.treasurers.org/hub/technical/brexit Brexit - ACT Resources]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]

Revision as of 19:28, 4 September 2017

US - securities

A strong form of protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors.

Under a make whole clause the borrower/issuer has to value the cash flows beyond the date of the early call/redemption at the US government bond yield.

This potentially makes it prohibitively expensive for the issuer to take an early redemption.

The consequence of a make whole clause for the investor is that they can re-invest the redemption monies in US government stock, thus preserving their originally expected cash inflows at lower risk.


Make whole clauses are similar in their effect to Spens clauses.


See also

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