Realisation procedures Clause Samples
The 'Realisation procedures' clause outlines the steps and processes to be followed when converting assets, securities, or collateral into cash or another form of value. Typically, this clause details the methods for selling, liquidating, or otherwise disposing of assets, including timelines, notification requirements, and the parties responsible for carrying out the realisation. For example, it may specify how and when a lender can sell pledged collateral if a borrower defaults. The core function of this clause is to ensure a clear, orderly, and fair process for asset realisation, thereby protecting the interests of the parties involved and minimizing disputes.
Realisation procedures. (a) The Asset Management Framework shall include rules relating to the maximization of the Net Realisation Proceeds. Except as set forth otherwise in a Policy approved by the Confederation, any Realisation (i) relating to a Major Transaction requires that at least three market bids were obtained or explanations are provided why there was no such second and/or third best bidder and (ii) relating to a Material Transaction requires that in case of Conflict relating to any Covered Asset Purchaser, procedures are applied that ensure that the Gross Realisation Proceeds and the Gross Realisation Payments are at arm’s length.
(b) For the purposes of the calculation of the relevant thresholds in the definition of “Material Transaction” and “Major Transaction”, the Realisation of a group of Covered Assets is deemed to be, and treated as, one transaction in respect of a Covered Asset, regardless of whether such Realisation is entered into or closed as one or a series of separate transactions, if either:
(i) they are in the same Covered Asset Class; or
(ii) they are in different Covered Asset Classes but sold in a package, and subject to a Realisation at a similar time to the same Covered Asset Purchaser or group of Covered Asset Purchasers in connection with a single or a series of related transactions. For the avoidance of doubt, parallel transactions with the same Covered Asset Purchaser that are not related will not be taken into account for the purpose of this paragraph (b).
(c) Where a Covered Asset and any other asset are sold as a package under a single transaction at a single price, UBS shall use commercially reasonable efforts to ensure that the price is being split in the Realisation Documentation to allow the determination of the amount of any Gross Realisation Proceeds attributable to the Covered Asset, and that this amount is determined in a commercially reasonable manner.