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Apple Delisting Concerns Prompt Doc Checkup

25 Aug 2006

Lawyers and dealers have been checking up on documentary provisions for equity derivatives linked to Apple, since Nasdaq warned the stock may be delisted because of a delay in its quarterly filing.

Lawyers and dealers have been checking up on documentary provisions for equity derivatives linked to Apple, since Nasdaq warned the stock may be delisted because of a delay in its quarterly filing. While most view a delisting as unlikely, it is a popular reference entity for U.S. retail investment products such as reverse convertibles.

One senior equity derivatives official at a firm which has issued apple-referenced investment notes said the Nasdaq warning served as a reminder to check up on documentary provisions for a delisting event. A lawyer explained a delisting would likely either count as a disruption event, or an event that would trigger the calculation agent to substitute the stock for another.

25 Aug 2006