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Closing out a {{gmsla}} is done following designation by a {{gmslaprov|Non-Defaulting Party}} of an {{gmslaprov|Event of Default}} under Paragraph {{gmslaprov|11.2}} as follows: | Closing out a {{gmsla}} is done following designation by a {{gmslaprov|Non-Defaulting Party}} of an {{gmslaprov|Event of Default}} under Paragraph {{gmslaprov|11.2}} as follows: | ||
===Loan Definition=== | ===Loan Definition=== | ||
Under the GMSLA a “{{gmslaprov|Loan}}” is defined as the transfer of securities from {{gmslaprov|Lender}} to {{gmslaprov|Borrower}} against a transfer of collateral by {{gmslaprov|Borrower}} to {{gmslaprov|Lender}}, with a simultaneous agreement to transfer back equivalent securities against equivalent collateral in the future. | Under the GMSLA a “{{gmslaprov|Loan}}” is defined as the transfer of securities from {{gmslaprov|Lender}} to {{gmslaprov|Borrower}} against a transfer of collateral by {{gmslaprov|Borrower}} to {{gmslaprov|Lender}}, with a simultaneous agreement to transfer back equivalent securities against equivalent collateral in the future. | ||
===Collateralisation=== | ===Collateralisation=== | ||
{{gmslaprov|Collateral}} for {{gmslaprov|Loan}} transactions is marked-to-market on a daily basis. In the market, such collateralisation operates on an “aggregated” basis across all outstanding Loans as is contemplated by Paragraph {{gmslaprov|5.4}} of the GMSLA. | {{gmslaprov|Collateral}} for {{gmslaprov|Loan}} transactions is marked-to-market on a daily basis. In the market, such collateralisation operates on an “aggregated” basis across all outstanding Loans as is contemplated by Paragraph {{gmslaprov|5.4}} of the GMSLA. | ||
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Therefore for the purposes of termination and close-out the value of {{gmslaprov|Collateral}} held against each {{gmslaprov|Loan}} at any time is able to be clearly determined. | Therefore for the purposes of termination and close-out the value of {{gmslaprov|Collateral}} held against each {{gmslaprov|Loan}} at any time is able to be clearly determined. | ||
====Loan Termination==== | ====Loan Termination==== | ||
*Under clause {{gmslaprov|8.2}} and {{gmslaprov|8.2}} of the {{tag|GMSLA}}, subject to the terms of any {{gmslaprov|Loan}}*, either party may terminate any {{gmslaprov|Loan}} at any time by calling for redelivery of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} (in the case of a {{gmslaprov|Lender}}) or giving notice of redelivery of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} (in the case of a {{gmslaprov|Borrower}}), in each case by [[title transfer]]. | *Under clause {{gmslaprov|8.2}} and {{gmslaprov|8.2}} of the {{tag|GMSLA}}, subject to the terms of any {{gmslaprov|Loan}}*, either party may terminate any {{gmslaprov|Loan}} at any time by calling for redelivery of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} (in the case of a {{gmslaprov|Lender}}) or giving notice of redelivery of {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} (in the case of a {{gmslaprov|Borrower}}), in each case by [[title transfer]]. |