Existing Loans - GMSLA Provision
2010 Global Master Securities Lending Agreement
Clause 27.4 in full
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There is no equivalent provision in the 2018 Pledge GMSLA. Agent lenders will need each principal’s consent before migrating loans from title transfer to pledge format, and (we can only surmise) it didn’t occur to ISLA’s crack drafting squad™ that no agent lender, let alone any principal, would ever want to have both title transfer and pledged collateral outstanding at any one time — and even if they did, as a practical matter this would impossible for brokers to reconcile in their trade monitoring and risking systems.
Since the nature of agency loans is that the master agreement is deemed to be a separate agreement between each principal and the dealer from the individual principal’s date of accession, nor does it make a difference that the master agreement between broker and agent may (and usually will) be executed before any individual principal is moved from one to the other. Anyway, this is angels on the head of a pin stuff, since no-one would take the point anyway.
The more pedantic will provide in Schedule 11 that those legacy stock lending agreements are all deemed terminated, and the super cautious might add, by way of wholly unnecessary clarification, that the extant loans are governed by the new agreement as a single agreement — but legally this doesn’t go much further than the text of para 27.4. If your netting engine is thrown for a loop by the existence of two live master agreements between the same counterparties (hey — it can happen) then formally terminating the superseded one for good order is a sensible step — but this is really an operational point more than a legal one.