Marking to Market of Collateral during the currency of a Loan on aggregated basis - 2000 GMSLA Provision

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2000 Global Master Securities Lending Agreement
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Clause 5.4 in a Nutshell
Use at your own risk, campers!

5.4 Marking to Market of Collateral during the currency of a Loan on aggregated basis Where the parties agree in 1.3 of the Schedule that they will mark Collateral to market on an aggregated basis under this paragraph (and not Loan-by-Loan under paragraph 5.5), unless they agree otherwise:-

(i) the aggregate Market Value of the Collateral provided to Lender (excluding any Equivalent Collateral returned under Paragraphs 5.4) or 5.5) (“Posted Collateral”) for all outstanding Loans will equal the aggregate Market Value of the Loaned Securities and the applicable Margin (the “Required Collateral Value”) for those Loans;
(ii) if on any Business Day the aggregate Market Value of Posted Collateral for all outstanding Loans exceeds the aggregate of the Required Collateral Values for those Loans, Lender must (on demand) return to Borrower such Equivalent Collateral as will eliminate the excess;
(iii) if on any Business Day the aggregate Market Value of Posted Collateral for all outstanding Loans falls below the aggregate of Required Collateral Values for all such Loans, Borrower must (on demand) provide to Lender enough further Collateral to eliminate the deficiency.

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Full text of Clause 5.4

5.4 Marking to Market of Collateral during the currency of a Loan on aggregated basis Unless paragraph 1.3 of the Schedule indicates that paragraph 5.5 shall apply in lieu of this paragraph 5.4, or unless otherwise agreed between the Parties:-

(i) the aggregate Market Value of the Collateral delivered to or deposited with Lender (excluding any Equivalent Collateral repaid or redelivered under Paragraphs 5.4(ii) or 5.5(ii) (as the case may be)) (“Posted Collateral”) in respect of all Loans outstanding under this Agreement shall equal the aggregate of the Market Value of the Loaned Securities and the applicable Margin (the “Required Collateral Value”) in respect of such Loans;
(ii) if at any time on any Business Day the aggregate Market Value of the Posted Collateral in respect of all Loans outstanding under this Agreement exceeds the aggregate of the Required Collateral Values in respect of such Loans, Lender shall (on demand) repay and/or redeliver. as the case may be, to Borrower such Equivalent Collateral as will eliminate the excess;
(iii) if at any time on any Business Day the aggregate Market Value of the Posted Collateral in respect of all Loans outstanding under this Agreement falls below the aggregate of Required Collateral Values in respect of all such Loans, Borrower shall (on demand) provide such further Collateral to Lender as will eliminate the deficiency.

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Related agreements and comparisons

Related agreements: Click here for the same clause in the 2010 GMSLA
Comparison: Click to compare the 2000 GMSLA and 2010 GMSLA versions of this clause.

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Content and comparisons

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Summary

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See also

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References