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2018 Global Master Securities Lending Agreement (Pledge Version)
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Clause 6.4 in a Nutshell™
Use at your own risk, campers!
6.4 Corporate actions
Where a holder is entitled to exercise any “corporate rights” under any Loaned Securities before the receiver can return equivalent ones to the provider, then the provider can, within a reasonable time before the relevant deadline, notify the receiver that it wishes to receive the Loaned Securities as if the corporate rights had been exercised.
“Corporate rights” include any:
- conversion, sub-division, consolidation or pre-emption rights;
- rights arising under a takeover offer;
- rights to receive securities now or in the future; or
- other rights, including ones requiring the holder to make an election.
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Full text of Clause 6.4
6.4 Corporate actions: Where, in respect of any Loaned Securities, any rights relating to conversion, sub-division, consolidation, pre-emption, rights arising under a takeover offer, rights to receive Securities or a certificate which may at a future date be exchanged for Securities or other rights, including those requiring election by the holder for the time being of such Securities, become exercisable prior to the Delivery of Equivalent Securities, then Lender may, within a reasonable time before the latest time for the exercise of the right or option give written notice to Borrower that on Delivery of Equivalent Securities it wishes to receive Equivalent Securities in such form as will arise if the right is exercised or, in the case of a right which may be exercised in more than one manner, is exercised as is specified in such written notice.
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Related agreements and comparisons
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Related agreements: Click here for the same clause in the 2010 GMSLA
Comparison: Click to compare the 2010 GMSLA and 2018 Pledge GMSLA versions of this clause.
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Content and comparisons
2010 GMSLA version concerns corporate actions on Loaned Securities and Collateral, whereas the 2018 Pledge GMSLA only talks about Loaned Securities for the very good reason that a pledgor does not transfer title to Collateral in the first place, so can still participate in corporate events on Collateral it has posted, by itself.
See also
References