Standard settlement time - OSLA Provision

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OSLA Anatomy™


In a Nutshell Clause 7(B):

7(B) Subject to Clause 8 and the terms of the Borrowing Request the Lender may call for redelivery of Equivalent Securities at any time by giving notice on any Business Day of not less than the standard settlement time for such Equivalent Securities. The Borrower must redeliver Equivalent Securities as the Lender directs by the expiry of its notice, and simultaneously the Lender must repay or redeliver equivalent Collateral.

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1995 OSLA full text of Clause 7(B):

7(B) Subject to Clause 8 hereof and the terms of the relevant Borrowing Request the Lender may call for the redelivery of all or any Equivalent Securities at any time by giving notice on any Business Day of not less than the standard settlement time for such Equivalent Securities on the exchange or in the clearing organisation through which the relevant borrowed Securities were originally delivered. The Borrower shall as hereinafter provided redeliver such Equivalent Securities not later than the expiry of such notice in accordance with the Lender's instructions. Simultaneously with the redelivery of the Equivalent Securities in accordance with such call, the Lender shall (subject to Clause 6(I), if applicable) repay any Cash Collateral and redeliver to the Borrower Collateral equivalent to the Collateral delivered pursuant to Clause 6 in respect of the borrowed Securities. For the avoidance of doubt any reference herein or in any other agreement or communication between the Parties (however expressed) to an obligation to redeliver or account for or act in relation to Collateral shall accordingly be construed as a reference to an obligation to redeliver or account for or act in relation to Equivalent Collateral.

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Well, not strictly speaking an 1995 OSLA provision — more a textual reference, in clauses 7(B) the “standard settlement time” is not defined in the 1995 OSLA but worth mentioning that, having recalled a loan, the Lender must allow at least a standard settlement cycle to get the securities back.

Which stands to reason, if you think about it. A Borrower who decides to terminate a loan can send them back immediately - it being harder (but, in my experience, not impossible) to take yourself by surprise.

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