Instructions relating to the Required Collateral Value and responsibility for the Custodian - Pledge GMSLA Provision
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2018 Global Master Securities Lending Agreement (Pledge Version)
Clause 5.4 in a Nutshell™ Use at your own risk, campers!
Full text of Clause 5.4
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This is an equivalent of the timing arrangements set out in Clause 5.8 of the 2010 GMSLA.
Summary
Remember the theory here, in contrast to the 2018 Pledge GMSLA is that the Borrower is managing collateral in a triparty system, and the Lender is an agent lender acting on behalf of some other wealthy buy and hold investor who has no particular use for the Collateral being posted to it, other than to act as security. Thus the Collateral never leaves the Borrower’s beneficial ownership, but just moves between its tri-party “long-box” and its a triparty pledge account — being a separate account in its name, only pledged to the Lender. All these movements will be handled by the triparty agent without the Borrower’s intervention, assuming the Borrower has funded enough assets in its long-box in the first place. Which, unless it is properly going down the Swanee, it will have done automatically. This is a big, bulk business.
Therefore no need for detailed deadlines for request, delivery and other settlement arrangements: Collateral is not flying bodily around the clearing systems, but lying still and simply being re-badged in the triparty custodian's books and records.
See also
Template:M sa Pledge GMSLA 5.4