Pari Passu (PARI):

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Pari Passu (PARI)

Status: Finalised Last Updated: 24 May 2021

SFTR Report – ETRM / NEWT | Corporate Action Cluster – Return and New Trade | Cash Move – N

Description:
Occurs when securities with different characteristics, for example, shares with different entitlements to dividend or voting rights, become identical in all respects, for example, pari-passu or assimilation. May be scheduled in advance, for example, shares resulting from a bonus may become fungible after a pre-set period of time, or may result from outside events, for example, merger, reorganisation, issue of supplementary tranches, etc.

Best Practice:
When booking a Pari Passu the original contract of the loan should be terminated, and a new contract posted. (COAC-56)