Template:M comp disc Pledge GMSLA 9

Counterintuitively, this mini-close out provision in the 2018 Pledge GMSLA is very similar to the one in the 2010 GMSLA. There is the notable absence of the clause about failure to return Collateral — but you can’t really blame ISLA’s crack drafting squad™ for that, seeing as the Borrower never delivers the Collateral to the Lender in the first place (it’s a pledge — see?). But otherwise it works in the same way.

This is because it only really applies to the Borrower, and — assuming the Borrower has not gone tette in alto, but is merely struggling to source Equivalent Securities to return because the market’s a bit dickey — you would not expect the Lender to enforce on the Collateral.