Delivery of Equivalent Securities on termination of a Loan - GMSLA Provision

GMSLA Anatomy™ Go Premium In a Nutshell™ Clause 8.3: 8.3 Delivery of Equivalent Securities on termination of a Loan: On termination of the Loan, Borrower will Deliver Equivalent Securities to Lender in accordance with the terms of the Loan. view template 2010 GMSLA full text of Clause 8.3: 8.3 Delivery of Equivalent Securities on termination of a Loan Borrower shall procure the Delivery of Equivalent Securities to Lender or deliver Equivalent Securities in accordance with this Agreement and the terms of the relevant Loan on termination of the Loan. For the avoidance of doubt any reference in this Agreement or in any other agreement or communication between the Parties (howsoever expressed) to an obligation to deliver or account for or act in relation to Loaned Securities shall accordingly be construed as a reference to an obligation to deliver or account for or act in relation to Equivalent Securities. view template 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 Index: Click ᐅ to expand: GMSLA Pledge GMSLA OSLA Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

What if the Securities have been cancelled, redeemed, or converted into something else? The elaborately defined adjective Equivalent does a lot of work here:

---

Equivalent in a Nutshell™ _{(GMSLA edition)}

Equivalent: securities that are fungible with the securities in question, as long as:

(a) Where the securities are partly paid or have been converted, subdivided, consolidated, made the subject of a takeover, rights of pre-emption, or include rights to receive securities, it includes securities a holder would be entitled after that event (having complied with all formalities) and provided that the party being paid the equivalent amount has given notice and paid the all sums required in time for the holder to exercise its rights.

(b) Where the securities:

(i) have been redeemed, it means the redemption proceeds;

(ii) are subject to a call, it means fungible securities, provided that receiving party thas paid the holder the amounts due in respect of the call;

(iii) are subject to a capitalisation issue, it includes securities allotted by way of bonus on the securities in question;

(iv) are subject to any similar event, it means those securities with (or replaced by) the cash and securities received by the holder in connection with the event.

view template

---

But what if the issuer has gone bust? Here there may be little or no liquidity in the shares — they may well have been delisted, for example. Look here to the mini-closeout provisions, which are designed to cope with exactly this kind of settlement failure.