Schedule 6 - GMSLA Provision
Just what significance a Designated Office has to a stock borrower or lender is never made clear in the 2010 GMSLA. It gets a mention in the first line of Clause 1.1 — encouraging, you would think — but then gets no further mention until it is defined, unenlighteningly, as you can see in the panel.
What are we to make of this? “The parties, acting through their Designated Offices, may enter into transactions ...” — that is a common or garden agreement to agree, folks — so is this meant to restrict the parties’ ability to act out of other offices?
Note in the more fulsomely-articulated ISDA Master Agreement the “Multibranch Parties” concept involves the party giving representations as to recourse, and expressly prohibits parties changing their specified Offices during the life of a transaction without the other’s prior written consent.
Details fans will immediately note that, from the point of view of legal and corporate philosophy — a subject dear to every attorney’s heart — the differing offices or branches of a legal entity have no distinct legal personality, any more than does a one’s arm have different personality one’s her leg. So, being a “multibranch” party, or acting out of a designated office, makes no legal difference. If you’re bound, you’re bound.
the main risk of booking out of the wrong entity is a taxation risk.
- Designated Office definition (don’t get your hopes up: it won’t help much tbh)
- Multibranch Parties in the ISDA Master Agreement
- Some would say, “tiresomely”-articulated.