5.5 - GMSLA Provision: Difference between revisions

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{{gmslasnap|5.5}}
#redirect[[Marking to Market of Collateral during the currency of a Loan on a Loan by Loan basis - GMSLA Provision]]
{{nuts|GMSLA|5.5}}
====Commentary====
See also {{gmslaprov|5.4}}, Collateralisation on aggregate, which will generally be the preferred alternative for most financial institutions.
 
====Summary====
In an {{nutshell}}:
{{box|
Where {{gmslaprov|5.5}} applies, the {{gmslaprov|Posted Collateral}} in respect of any {{gmslaprov|Loan}} bears the same proportion to the {{gmslaprov|Market Value}} of the {{gmslaprov|Loaned Securities}} as the {{gmslaprov|Posted Collateral}} bore at the commencement of the {{gmslaprov|Loan}}. Accordingly: <br>
:(a) the {{gmslaprov|Market Value}} of the {{gmslaprov|Posted Collateral}} must always equal the {{gmslaprov|Required Collateral Value}}; <br>
:(b) whenever the {{gmslaprov|Market Value}} of the {{gmslaprov|Posted Collateral}} for any {{gmslaprov|Loan}} (including unpaid amounts and unpaid {{gmslaprov|Income}} on {{gmslaprov|Non-Cash Collateral}}) exceeds the {{gmslaprov|Required Collateral Value}} under the {{gmslaprov|Loan}} (including all amounts due by the {{gmslaprov|Borrower}} and <br>
::(ii) any {{gmslaprov|Income}} payable in respect of {{gmslaprov|Equivalent Securities}},<br>
:{{gmslaprov|Lender}} shall repay to {{gmslaprov|Borrower}} such Equivalent Collateral to eliminate the excess; and <br>
:(c) whenever the {{gmslaprov|Market Value}} of the {{gmslaprov|Posted Collateral}} together with: <br>
::(i) all amounts due by the Lender under the Loan; and <br>
::(ii) any {{gmslaprov|Income}} payable on {{gmslaprov|Non-Cash Collateral}} <br>
:falls below the {{gmslaprov|Required Collateral Value}} together with: <br>
::(i) all amounts due by the {{gmslaprov|Borrower}} under the {{gmslaprov|Loan}}; and <br>
::(ii) any {{gmslaprov|Income}} payable under the {{gmslaprov|Equivalent Securities}}, {{gmslaprov|Borrower}} shall (on demand) provide further {{gmslaprov|Collateral}} to {{gmslaprov|Lender}} to eliminate the deficiency.<br>
}}
 
====See Also====
 
{{gmslaanatomy}}

Latest revision as of 15:06, 23 December 2015