Terms and conditions
Terms and conditions means any definition of the trading unit or the specific asset underlying a security-based swap, description of the payments to be exchanged under a security-based swap, specification of cash settlement or delivery standards and procedures, and establishment of buyers' and sellers' rights and obligations under the security-based swap. Terms and conditions of a security-based swap include provisions relating to the following:
(1) Identification of the major group, category, type, or class in which the security-based swap falls (such as a credit or equity security-based swap) and of any further sub-group, category, type, or class that further describes the security-based swap;
(2) Notional amounts, quantity standards, or other unit size characteristics;
(3) Any applicable premiums or discounts for delivery of a non-par product;
(4) Trading hours and the listing of security-based swaps;
(5) Pricing basis for establishing the payment obligations under, and mark-to-market value of, the security-based swap including, as applicable, the accrual start dates, termination, or maturity dates, and, for each leg of the security-based swap, the initial cash flow components, spreads, and points, and the relevant indexes, prices, rates, coupons, or other price reference measures;
(6) Any price limits, trading halts, or circuit breaker provisions, and procedures for the establishment of daily settlement prices;
(7) Payment and reset frequency, day count conventions, business calendars, and accrual features;
(8) If physical delivery applies, delivery standards and procedures, including fees related to delivery or the delivery process, alternatives to delivery, and applicable penalties or sanctions for failure to perform;
(9) If cash-settled, the definition, composition, calculation, and revision of the cash settlement price, and the settlement currency;
(10) Payment or collection of option premiums or margins;
(11) Option exercise price, if it is constant, and method for calculating the exercise price, if it is variable;
(12) Threshold prices for an option, the existence of which is contingent upon those prices;
(13) Any restrictions or requirements for exercising an option; and
(14) Life cycle events.