Exclusive securities lending agreement: Difference between revisions
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Top Trumps® Financial Weapons of Mass Destruction®
ESLA “It’s stock lending, for posh people.”
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Conceptual question: is an ESLA a form of [[equity option]]? Should you figure it into your shareholding disclosure programme? Is it subject to {{tag|EMIR}} collateralisation and all that guff? | Conceptual question: is an ESLA a form of [[equity option]]? Should you figure it into your shareholding disclosure programme? Is it subject to {{tag|EMIR}} collateralisation and all that guff? | ||
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*{{tag|GMSLA Anatomy}} |
Latest revision as of 11:36, 18 January 2020
Docs | Appendage to a stock lending agreement. Extra mark for needless verbosity. | 3 |
Amendability | Bilateral. Easyt peasy. | 0 |
Collateral | Yes, per stock lending agreement. Liquid, daily, but may be crappy assets. | 3 |
Transferability | Not without novation. But why would you? | 0 |
Leverage | Nope | 0 |
Fright-o-meter | Well, it’s used in connection with short selling but really, snoresville. | 1 |
An exclusive securities lending agreement (“ESLA”) is an arrangement where a Lender grants a Borrower the exclusive right to borrow from a portfolio of securities. It is documented under a separate ESLA, an additional legal agreement governing the terms of the exclusivity. It covers a pre-agreed period and may include specific programme parameters and eligibility criteria.
Conceptual question: is an ESLA a form of equity option? Should you figure it into your shareholding disclosure programme? Is it subject to EMIR collateralisation and all that guff?