82,890
edits
Events of Default - GMSLA Provision: Difference between revisions
→The position under the GMSLA and OSLA master agreements
Amwelladmin (talk | contribs) (Created page with "Why Bank does not apply an {{gmslaprov|Event of Default}} to stock lending failures to deliver ====The position under the GMSLA and OSLA master agreements==== Th...") |
Amwelladmin (talk | contribs) |
||
| Line 1: | Line 1: | ||
Why Bank does not apply an {{gmslaprov|Event of Default}} to [[stock lending]] failures to deliver | Why Bank does not apply an {{gmslaprov|Event of Default}} to [[stock lending]] failures to deliver | ||
===The position under the [[GMSLA]] and [[OSLA]] master agreements=== | |||
====GMSLA==== | |||
The [[Global Master Securities Lending Agreement]] provides that a [[failure to deliver]] securities is an {{gmslaprov|Event of Default}}. If a delivery failure occurs, the day after the delivery was expected the intended recipient can terminate and cover all open positions, meaning that the party expected to deliver the securities must pay the bid-offer spread on all open positions. | The [[Global Master Securities Lending Agreement]] provides that a [[failure to deliver]] securities is an {{gmslaprov|Event of Default}}. If a delivery failure occurs, the day after the delivery was expected the intended recipient can terminate and cover all open positions, meaning that the party expected to deliver the securities must pay the bid-offer spread on all open positions. | ||
====OSLA==== | |||
By contrast in the [[Overseas Securities Lenders’ Agreement]], a failure to deliver was not an {{gmslaprov|Event of Default}}. Rather, a failure to deliver securities to initiate a loan is not a breach of agreement, and a failure to redeliver securities at the end of a loan allows the lender to buy in securities to cover the fail. | |||
Under both the {{gmslaprov|GMSLA}} and the {{gmslaprov|OSLA}}, a failure to deliver collateral is an {{gmslaprov|Event of Default}}. | Under both the {{gmslaprov|GMSLA}} and the {{gmslaprov|OSLA}}, a failure to deliver collateral is an {{gmslaprov|Event of Default}}. | ||