Substitutions of Collateral - GMSLA Provision: Difference between revisions

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{{gmslasnap|5.3}}
{{gmslaanat|5.3}}
====Commentary====
Unlike the {{csa}}, a {{gmslaprov|Borrower}} under the {{gmsla}} can require a Lender to switch {{gmslaprov|Collateral}} posted to it with {{gmslaprov|Alternative Collateral}} (provided it is acceptable to the {{gmslaprov|Lender}}, which it will be if it meets the definition of {{gmslaprov|Collateral}} and is listed in {{gmslaprov|Schedule 1}}).  
Unlike the {{csa}}, a {{gmslaprov|Borrower}} under the {{gmsla}} can require a Lender to switch {{gmslaprov|Collateral}} posted to it with {{gmslaprov|Alternative Collateral}} (provided it is acceptable to the {{gmslaprov|Lender}}, which it will be if it meets the definition of {{gmslaprov|Collateral}} and is listed in {{gmslaprov|Schedule 1}}).  


By contrast, under Paragrpah {{csaprov|3(c)}} of the CSA, a switch of posted Collateral requires the consent of the holding party (see {{csaprov|3(c)(ii)}}). The FOA Exchange-Traded Derivatives Agreement is similar to the ISDA CSA.
By contrast, under Paragraph {{csaprov|3(c)}} of the CSA, a switch of posted Collateral requires the consent of the holding party (see {{csaprov|3(c)(ii)}}). The FOA Exchange-Traded Derivatives Agreement is similar to the ISDA CSA.


====Related Provisions====
===[[Pledge GMSLA]]===
 
The [[Pledge GMSLA]] does not have an equivalent provision. This is not for any reason that timidity — counsel drafting it (who shall remain nameless but once upon a time there was a bit of nominative determinism for those inclined to guess) thought it was a bit hard to deal with the security issues relating to substitution, so they just didn’t. Stuff and nonsense, we at the [[JC]] say.
 
{{gmslaanatomy}}

Revision as of 12:02, 10 January 2019

GMSLA Anatomy™


In a Nutshell™ Clause 5.3:

5.3 Substitutions of Collateral
Borrower may substitute any Collateral it has posted with Alternative Collateral that is acceptable to Lender long as it delivers the Alternative Collateral first, and otherwise meets the Required Collateral Value requirement at all times.
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2010 GMSLA full text of Clause 5.3:

5.3 Substitutions of Collateral
Borrower may from time to time call for the repayment of Cash Collateral or the Delivery of Collateral equivalent to any Collateral delivered to Lender prior to the date on which the same would otherwise have been repayable or deliverable provided that at or prior to the time of such repayment or Delivery Borrower shall have delivered Alternative Collateral acceptable to Lender and Borrower is in compliance with paragraph 5.4 or paragraph 5.5, as applicable.
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2010 GMSLA: Full wikitext · Nutshell wikitext | GMLSA legal code | GMSLA Netting

Pledge GMSLA: Hard copy (ISLA) · Full wikitext · Nutshell wikitext |
1995 OSLA: OSLA wikitext | OSLA in a nutshell | GMSLA/PGMSLA/OSLA clause comparison table
From Our Friends On The Internet: Guide to equity finance | ISLA’s guide to securities lending for regulators and policy makers

Navigation
2010 GMSLA 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · 22 · 23 · 24 · 25 · 26 · 27 · Schedule · Agency Annex · Addendum for Pooled Principal Agency Loans

2018 Pledge GMSLA 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · 22 · 23 · 24 · 25 · 26 · 27 · 28 · Schedule · Agency Annex

Stock lending agreement comparison: Includes navigation for the 2000 GMSLA and the 1995 OSLA

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Unlike the 1995 CSA, a Borrower under the 2010 GMSLA can require a Lender to switch Collateral posted to it with Alternative Collateral (provided it is acceptable to the Lender, which it will be if it meets the definition of Collateral and is listed in Schedule 1).

By contrast, under Paragraph 3(c) of the CSA, a switch of posted Collateral requires the consent of the holding party (see 3(c)(ii)). The FOA Exchange-Traded Derivatives Agreement is similar to the ISDA CSA.

Pledge GMSLA

The Pledge GMSLA does not have an equivalent provision. This is not for any reason that timidity — counsel drafting it (who shall remain nameless but once upon a time there was a bit of nominative determinism for those inclined to guess) thought it was a bit hard to deal with the security issues relating to substitution, so they just didn’t. Stuff and nonsense, we at the JC say.

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