Nominee - Pledge GMSLA Provision
2018 Global Master Securities Lending Agreement (Pledge Version)
Clause Nominee in a Nutshell™
Full text of Clause Nominee
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The reference (in the pledge version only) to a Nominee, may be to recognise that the 2018 Pledge GMSLA is typically suitable only for agency lending arrangements, in which the principal Lenders to the Loans will be wealth-management clients and funds whose assets are managed by an agent lender, who in turn has put the whole business in the hands of a triparty agent, who will manage the collateral flows, pledges and all that good oil.
Though why they didn’t say “tri-party agent”, it is hard to say, since “nominee” has, in other custody contexts, a rather different meaning. And there is nothing to stop folks using a tri-party arrangement with a normal 2010 GMSLA either, for that matter, and it has routinely been done for as long as anyone can remember.
Now had ISLA’s crack drafting squad™ taken the dramatic step of writing “nominee” in lower case in Paragraph 1.3, or better still, didn’t put in a Paragraph 1.3 at all — since it is an “I never said you couldn’t” sort of a provision.
You may be wondering in what context the idea of a Nominee arises in the 2010 GMSLA. Joyously, only in this one: Clause 1.3 generously allows that either party may perform its obligations through a nominee:
Worth waiting for, wasn’t it. Especially when you consider that permissive statements of this kind really go without saying: “I never said you couldn’t”
Look, I didn’t write this stuff, folks.