Termination of course of dealings by notice - OSLA Provision

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1995 Overseas Securities Lender’s Agreement
A Jolly Contrarian owner’s manual™

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Clause 15 in a Nutshell

Use at your own risk, campers!
15. Termination by notice
Each Party may terminate this Agreement on 15 Business Days’ written notice as long as all outstanding loans have been terminated under this Agreement and the Rules.

Full text of Clause 15

15 Termination of course of dealings by notice
Each Party shall have the right to bring the course of dealing contemplated under this Agreement to an end by giving not less than 15 Business Days’ notice in writing to the other Party (which notice shall specify the date of termination) subject to an obligation to ensure that all loans and which have been entered into but not discharged at the time such notice is given are duly discharged in accordance with this Agreement and with the Rules.

Related agreements and comparisons

Related agreements: Click here for the equivalent clause in the 2010 GMSLA
Comparison: Template:Osladiff NA

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Content and comparisons

The equivalent of this clause in the 2010 GMSLA is Clause 16:

By way of further comparison, the ISDA Master Agreement doesn’t have a general termination right of this sort at all. You can only terminate Transactions, not the master agreement construct which sits around them itself. It is an immortal husk. This is to do with paranoid fears about the efficacy of the ISDA’s sainted close-out netting terms — meh; maybe — but I like to think it has unleashed on the world an army of wight-walker zombie ISDAs, doomed to roam the earth until the day of judgment, apropos nothing but there, undead, and ready to animate and rally to the banner of Sauron, Beelzebub, Lehman Brothers etc., should they be reincarnated, to rain apocalyptic hell on the armies of men.

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Summary

What on earth, you might muse, is a “course of dealing”? According to BusinessDictionary.com, it is “a pattern of normal business conduct between two parties. It is established over a period involving several transactions, and may be used as a reliable indicator of how they intend to deal in the future.”

In any weather, it adds nothing but heft to this clause. This is a standard termination on notice clause for the 1995 OSLA itself, but doesn’t cut across the terms — and in particular, any stipulated term for any loan, which will be set out in a Borrowing Request[1] They made a much better fist of it in the GMSLA.

So before you can use this clause, you must validly terminate each loan under the terms of its Borrowing Request.

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General discussion

Template:M gen OSLA 15

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See also

Template:M sa OSLA 15

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References

  1. Curiously, the OSLA doesn’t define a “loan” as such, but rather refers to the terms, accepted by the Lender, of a Borrowing Request. This is counting-sheep-legs-and-dividing-by-four behaviour, calculated to discombobulate non-specialists and keep them away.