Marking to Market of Collateral during the currency of a Loan on aggregated basis - GMSLA Provision: Difference between revisions

GMSLA allows you to specify that {{gmslaprov|Collateral}} managed on an aggregate basis, under this Clause, or on a loan-by-loan basis under Clause {{gmslaprov|5.5}}. Generally speaking it is easier (and in a [[close out]] situation against a non-[[netting]] countertparty, more [[capital]] effective) to collateralise on an aggregate basis under this Clause so this will be the strong preference for most counterparties except in fairly unusual or bespoke situations.

Unless "single {{gmslaprov|Loan}} margining" under {{gmslaprov|5.5}} applies:  

:(a) '''{{gmslaprov|Required Collateral Value}}''': The aggregate {{gmslaprov|Market Value}} of {{gmslaprov|Posted Collateral}} in respect of all outstanding {{gmslaprov|Loans}} must equal the aggregate {{gmslaprov|Market Value}} of the {{gmslaprov|Loaned Securities}} plus applicable {{gmslaprov|Margin}}.

:{{gmslaprov|Borrower}} must provide such further {{gmslaprov|Collateral}} to {{gmslaprov|Lender}} as will eliminate the deficiency;<br>

:(d) '''Shorts and Longs''': where a {{gmslaprov|Party}} acts as both {{gmslaprov|Lender}} and {{gmslaprov|Borrower}} under this {{gmslaprov|Agreement}}, the provisions of paragraphs {{gmslaprov|5.4}}(b) and {{gmslaprov|5.4}}(c) shall apply separately (and without duplication) in respect of {{gmslaprov|Loans}} entered into by that {{gmslaprov|Party}} as {{gmslaprov|Lender}} and {{gmslaprov|Loans}} entered into by that {{gmslaprov|Party}} as {{gmslaprov|Borrower}}.

====See Also====

{{gmslaanatomy}}