Stock lending anatomy

GMSLA Anatomy™ Go premium The Varieties of Stock Lending Experience Subject 2010 GMSLA 2018 Pledge GMSLA 1995 OSLA Applicability/Preamble 1 1 Preamble Interpretation 2 2 1 Definitions 2.1 2.1 1 Loans of Securities 3 3 2 Delivery 4 4 3 Collateral 5 5 6 Distributions and Corporate Actions 6 6 4 (“Rights and Title”) Rates for Loans and Collateral 7 7 4 Delivery of Equivalent Securities 8 8 7 Failure to Deliver 9 9 N/A Events of Default 10 10 12 Consequences of Events of Default 11 11 8 (“Set-off”) Taxation 12 12 9 Lender's Warranties 13 13 10 Borrower's Warranties 14 14 11 Interest on Outstanding Payments 15 15 13 Termination of Agreement 16 16 15 Single Agreement 17 17 N/A Severance 18 18 18 Specific Performance 19 19 19 Notices 20 20 20 Assignment 21 21 21 Non-Waiver 22 21 22 Governing Law and Jurisdiction 23 23 26 Time 24 24 24 Recording 25 25 25 Waiver of Immunity 26 26 N/A Expenses N/A 27 N/A Miscellaneous 27 28 N/A Resources and Navigation Navigation 2010 GMSLA 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · 22 · 23 · 24 · 25 · 26 · 27 · Schedule · Agency Annex · Addendum for Pooled Principal Agency Loans 2018 Pledge GMSLA 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · 22 · 23 · 24 · 25 · 26 · 27 · 28 · Schedule · Agency Annex Stock Loan owner’s manuals: 2010 GMSLA · 2000 GMSLA · Pledge GMSLA · OSLA Index: Click ᐅ to expand: GMSLA Pledge GMSLA

Here is an entry point into the unexciting but fundamentally important world of stock lending.

Being UK-focused, I will mainly hinge on the English-law agreements, of which there are three: the for-historical-interest-only-at-this-point Overseas Securities Lenders’ Agreement of 1995, known fondly as the “OSLA”, the 2010 Global Master Securities Lending Agreement — the “GMSLA”, and the Global Master Securities Lending Agreement (Security Interest over Collateral 2018 version), known to its friends as the “Pledge GMSLA”.

At one point there was a 2000 Global Master Securities Lending Agreement, and at one point I had an anatomy of it, but I gather it was never really in widespread use — evidently, it is riddled with errors — so I have taken the executive decision to remove it from the JC. If anyone is wildly aggrieved by this decision, do let me know.

These days the 1995 OSLA is no longer supported by netting opinions and so, I suspect, is rapidly falling out of any use it was still enjoying.

The 2010 GMSLA is the standard stock lending agreement.

The 2018 Pledge GMSLA is a specialist agreement designed only for agent lending arrangements, And was brought in to address the fact that under a title transfer arrangement, excess collateral delivered to the agent lender attracts a capital charge

2010 GMSLA	2018 Pledge GMSLA	1995 OSLA
Preamble	Preamble	Preamble
1. Applicability	1. Applicability	1 Interpretation Act of Insolvency Agent Alternative Collateral Appropriate Tax Vouchers Approved UK Collecting Agent Approved Intermediary Assured Payment Assured Payment Agreement Base Currency Bid Price Bid Value Borrower Borrowing Request Business Day Cash Collateral Central Gilts Office CGO CGO Collateral CGO Rules Close of Business Collateral Defaulting Party Equivalent Collateral Collateral equivalent to Equivalent Securities Event of Default Income Income Payment Date Lender Manufactured Dividend Margin Nominee Non-Defaulting Party Offer Price Offer Value Parties Performance Date Principal Reference Price Relevant Payment Date Rules Securities Settlement Bank Settlement Date Stock Exchange Value
2. Interpretation 2.1 Definitions Act of Insolvency Agency Annex Alternative Collateral Applicable Law Automatic Early Termination Base Currency Business Day Buy In Cash Collateral Close of Business Collateral Defaulting Party Delivery Designated Office Equivalent or equivalent to Income Income Record Date Letter of Credit Loaned Securities Margin Market Value Nominee Non Cash Collateral Non Defaulting Party Notification Time Parties Posted Collateral Reference Dealers Required Collateral Value Sales Tax Settlement Date Stamp Tax Tax 2.2 Headings 2.3 Market terminology 2.4 Currency conversions 2.5 2.6 Modifications etc. to legislation	2. Interpretation 2.1 Definitions Act of Insolvency Applicable Law Base Currency Business Day Buy In Cash Cash Collateral Close of Business Collateral Control Agreement Custodian Defaulting Party Delivery Designated Office Equivalent or equivalent to Income Income Record Date Letter of Credit Loaned Securities Margin Market Value Nominee Non Defaulting Party Notification Time Parties Posted Collateral Reference Dealers Required Collateral Value Sales Tax Secured Account Security Agreement Settlement Date Stamp Tax Tax Template:Pgmslaprovv 2.2 Headings 2.3 Market terminology 2.4 Currency conversions 2.5 2.6 Modifications etc. to legislation	2. Loans of Securities
3. Loans of Securities	3. Loans of Securities	3. Delivery of Securities
4.1 Delivery 4.1 Delivery of Securities on commencement of Loan 4.2 Requirements to effect Delivery 4.3 Deliveries to be simultaneous unless otherwise agreed 4.4 Deliveries of Income	4. Delivery 4.1. Delivery of Securities on commencement of Loan 4.2. Requirements to effect Delivery 4.3. Deliveries of Income	4. Rights and title a(A) (Documents of title) 4(B) (Income) 4(B)(i) (Income Payment Dates) 4(B)(ii) (Manufactured Dividends) 4(B)(iii) (Tax deductions on Manufactured Dividends) 4(B)(iv) (Payment through an Approved UK Intermediary or Approved UK Collecting Agent) 4(B)(v) (Interest) 4(B)(vi) (Voting rights) 4(B)(vii) (Conversion rights, etc.) 4(B)(viii) (Payments under this Clause)
5. Collateral 5.1 Delivery of Collateral on commencement of a Loan 5.2 Deliveries through securities settlement systems generating automatic payments 5.3 Substitutions of Collateral 5.4 Marking to Market of Collateral during the currency of a Loan on aggregated basis 5.5 Marking to Market of Collateral during the currency of a Loan on a Loan by Loan basis 5.6 Requirements to deliver excess Collateral 5.7 (Attribution of Collateral to Loans) 5.8 Timing of repayments of excess Collateral or deliveries of further Collateral 5.9 Substitutions and extensions of Letters of Credit	5. Collateral 5.1 Delivery of Collateral on commencement of a Loan 5.2 Deliveries through securities settlement systems generating automatic payments 5.3 Marking to Market of Collateral during the currency of a Loan 5.4 Instructions relating to the Required Collateral Value and responsibility for the Custodian	5. Rates
6. Distributions and Corporate Actions 6.1 Income Received 6.2 Manufactured payments in respect of Loaned Securities 6.3 Manufactured payments in respect of Non-Cash Collateral 6.4 Indemnity for failure to redeliver Equivalent Non-Cash Collateral 6.5 Income in the form of Securities 6.6 Exercise of voting rights 6.7 Corporate actions	6. Distributions and Corporate Actions 6.1 Manufactured payments in respect of Loaned Securities 6.2 Income in the form of Securities 6.3 Exercise of voting rights 6.4 Corporate actions	6. Collateral
7. Rates applicable to Loaned Securities and Cash Collateral 7.1 Rates in respect of Loaned Securities 7.2 Rates in respect of Cash Collateral 7.3 Payment of rates	7. Rates Applicable to Loaned Securities	7. Redelivery of Equivalent Securities 7(A) Borrower’s undertaking to redeliver Equivalent Securities 7(B) Lender’s right to call for redelivery of Equivalent Securities 7(C) Lender’s election where Borrower does not return Equivalent Securities 7(D) Borrower to pay reasonable costs of any Buy-in 7(E) Borrower’s right to terminate loans 7(F) Redelivery of Talisman certificates
8. Delivery of Equivalent Securities 8.1. Lender’s right to terminate a Loan 8.2. Borrower’s right to terminate a Loan 8.3. Delivery of Equivalent Securities on termination of a Loan 8.4. Delivery of Equivalent Collateral on termination of a Loan 8.5. Delivery of Letters of Credit 8.6. Delivery obligations to be reciprocal	8. Delivery of Equivalent Securities 8.1. Lender’s right to terminate a Loan 8.2. Borrower’s right to terminate a Loan 8.3. Non-Defaulting Party’s right to terminate all Loans 8.4. Delivery of Equivalent Securities on termination of a Loan	8 Set-off etc. 8(A) Redelivery on the Performance Date 8(B) Acceleration on Event of Default 8(C) Relevant Value 8(D) Bid Value and Offer Value 8(E) Buy Ins 8(F) Non Cash Securities as Collateral 8(G) Event of Default on failure to redeliver 8(H) Waiver in case of practical difficulties redelivering
9. Failure to Deliver 9.1 Borrower’s failure to deliver Equivalent Securities 9.2 Lender’s failure to deliver Equivalent Collateral 9.3 Failure by either Party to deliver	9. Failure to Deliver 9.1 Borrower’s failure to deliver Equivalent Securities 9.2 Failure by either Party to deliver or instruct delivery	9. Taxation
10. Events of Default 10.1 List of Events of Default 10.1(a): Failure to pay Collateral 10.1(b): Unremedied failure to manufacture payments 10.1(c): Failure to pay or deliver 10.1(d): Insolvency 10.1(e): Breach of warranty 10.1(f): Repudiation 10.1(g): Seizure of assets 10.1(h): Suspension from exchange 10.1(i): Unremedied failure to perform 10.2 Notification of Events of Default 10.3 Complete statement of remedies 10.4 No consequential loss	10. Events of Default 10.1 List of Events of Default 10.1(a): Failure to pay Collateral 10.1(b): Unremedied failure to manufacture payments 10.1(c): Failure to pay or deliver 10.1(d): Insolvency 10.1(e): Breach of warranty 10.1(f): Repudiation 10.1(g): Seizure of assets 10.1(h): Suspension from exchange 10.1(i): Unremedied failure to perform 10.1(j): Default under Security Agreement 10.2 Notification of Events of Default 10.3 No consequential loss	10. Lender’s Warranties
11. Consequences of an Event of Default 11.1 Application of 11.2 to 11.7 following Event of Default 11.2 Delivery and payment obligations following Event of Default 11.3 Definition of Default Market Value 11.4 Determination of Default Market Value 11.5 Net Value determination where unable to sell Securities 11.6 Where Non-Defaulting Party has not determined Default Market Value 11.7 Other costs, expenses and interest payable in consequence of an Event of Default 11.8 Set-off	11. Consequences of an Event of Default 11.1 Application of 11.2 to 11.8 following Event of Default 11.2 Delivery and payment obligations following Event of Default 11.3 Definition of Default Market Value 11.4 Determination of Default Market Value 11.5 Net Value determination where unable to sell Securities 11.6 Where Non-Defaulting Party has not determined Default Market Value 11.7 Other costs, expenses and interest payable in consequence of an Event of Default 11.8 Set-off	11. Borrower’s Warranties
12. Taxes 12.1. Withholding, gross up and provision of information 12.2. Deduction 12.3. Cooperation 12.4. Stamp Tax 12.5. Tax indemnity 12.6. Sales Tax 12.7. Retrospective changes in law	12. Taxes 12.1. Withholding, gross up and provision of information 12.2. Deduction 12.3. Cooperation 12.4. Stamp Tax 12.5. Tax indemnity 12.6. Sales Tax 12.7. Retrospective changes in law	12. Events of Default
13. Lender’s Warranties	13. Lender’s Warranties	13. Outstanding Payments
14. Borrower’s Warranties	14. Borrower’s Warranties	14. Transactions Entered into as Agent
15. Interest on Outstanding Payments	15. Interest on Outstanding Payments	15. Termination of Course of Dealings by Notice
16. Termination of this Agreement	16. Termination of this Agreement	16. Governing Practices
17. Single Agreement	17. Single Agreement	17. Observance of Procedures
18. Severance	18. Severance	18. Severance
19. Specific Performance	19. Specific Performance	19. Specific Performance
20. Notices	20. Notices	20. Notices
21. Assignment	21. Assignment	21. Assignment
22. Non Waiver	22. Non-Waiver	22. Non-Waiver
23. Governing Law and Jurisdiction	23. Governing Law and Jurisdiction	23. Arbitration and Jurisdiction
24. Time	24. Time	24. Time
25. Recording	25. Recording	25. Recording
26. Waiver of Immunity	26. Waiver of Immunity	26. Governing Law
27. Miscellaneous 27.1 - Entire agreement 27.2 - Warranty as to text 27.3 - Amendments 27.4 - Existing Loans 27.5 - Automation 27.6 - Survival on termination of obligations 27.7 - Survival on termination of warranties 27.8 - Rights cumulative 27.9 - Counterparts 27.10 - Contracts (Rights of Third Parties) Act 1999	27. Expenses
	28. Miscellaneous 28.1 - Entire agreement 28.2 - Warranty as to text 28.3 - Amendments 28.4 - Automation 28.5 - Survival on termination of obligations 28.6 - Survival on termination of warranties 28.7 - Rights cumulative 28.8 - Counterparts 28.9 - Contracts (Rights of Third Parties) Act 1999
Schedule	Schedule	Template:1995 OSLA Section Schedule TOC
Agency Annex	Agency Annex	Template:1995 OSLA Section Appendix TOC