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Sure, it is preliminary, preamble stuff, but this goes to the core of what is so structurally different — economically, they’re meant to be as near as dammit the same — about the 2018 Pledge GMSLA when compared with the 2010 GMSLA. The 2010 GMSLA is a two-way title transfer agreement, where credit risk mitigation functions by offset, leaving the person who has transferred the greater value of assets (usually, ironically, the Borrower) with residual credit exposure, for the difference, to the one who has transferred the lesser value — usually the Lender, as it will insist on being over-collateralised by way of initial margin.

The 2018 Pledge GMSLA, by contrast, is a conventional secured “Loan” where the Lender has credit exposure to the Borrower for the total value of the Loaned Securities, but this is collateralised by a pledge over Collateral to which the Borrower retains legal title.

The reference to a Nominee, we think, is a flag 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, abnd who have handed over responsibility for managing their Loans to the agent lender.