Template:M comp disc GMSLA 9
- 9.1 Borrower’s failure to deliver Equivalent Securities
- 9.2 Lender’s failure to deliver Equivalent Collateral
- 9.3 Failure by either Party to deliver
Paragraph 9 of the 2010 GMSLA is broadly the same in the 2018 Pledge GMSLA, only with no reference to failure by the Lender to return Equivalent Collateral, all for the sensible reason that, under the 2018 Pledge GMSLA construct, the Lender never gets its mitts on the Collateral in the first place, so is hardly in a position to fail to return it.
Comparable master agreements
We are given to understand that neither the Global Master Repurchase Agreement, its American cousin the Master Repurchase Agreement nor the American stock lending agreement the Master Securities Lending Agreement have comparable mini-close-out provisions, though it is understood as a matter of good form that where there has been a simple innocent settlement failure and one can safely buy in — thereby helping oneself — one would never be so vulgar or unsportspersonlike as to actually call an Event of Default. And the market seems cool with that — cognitive dissonance to the power of one — until it comes to worrying whether that will impact a cross-default under a neighbouring ISDA Master Agreement, at which point the buyside market flips out — cognitive dissonance to the power of a trillion.