Attribution of Collateral to Loans - GMSLA Provision

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2010 Global Master Securities Lending Agreement
A Jolly Contrarian owner’s manual

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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
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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 Loan owner’s manuals: 2010 GMSLA · 2000 GMSLA · Pledge GMSLA · OSLA

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GMSLA

Clause 5.7 in a Nutshell
Use at your own risk, campers!

5.7 Where Equivalent Collateral is delivered and the Parties have not agreed otherwise it will be attributed to the earliest outstanding Loan up to the point at which the Market Value of Collateral for that Loan equals its Required Collateral Value, and then to the next earliest outstanding Loan and so on.
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Full text of Clause 5.7

5.7 Where Equivalent Collateral is repaid or delivered (as the case may be) or further Collateral is provided by a Party under paragraph 5.6, the Parties shall agree to which Loan or Loans such repayment, delivery or further provision is to be attributed and failing agreement it shall be attributed, as determined by the Party making such repayment, delivery or further provision to the earliest outstanding Loan and, in the case of a repayment or delivery up to the point at which the Market Value of Collateral in respect of such Loan equals the Required Collateral Value in respect of such Loan, and then to the next earliest outstanding Loan up to the similar point and so on.
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Related agreements and comparisons

Related agreements: Click here for the same clause in the 2018 Pledge GMSLA
Related agreements: Click here for the same clause in the 1995 OSLA
Comparison: Template:Gmsladiff 5.7
Comparison: Template:Osladiff 5.7

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Content and comparisons

Since it relates to the 2010 GMSLA’s netting arrangements and, by its very underlying theory, there is no netting in a 2018 Pledge GMSLA, there is no equivalent provision in the 2018 Pledge GMSLA.
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Summary

This is a key provision in terms of the GMSLA Netting analysis because it provides a means for ascertaining the particular collateral that is attributable to a given Loan, which means that, should you decide to voluntarily terminate all Loans as a prelude to a close out, there is certainty as to what Collateral attaches to what loan, and you can therefore determine the Default Market Value and so on.
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See also

Template:M sa GMSLA 5.7
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References