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Mastering Securities Lending Documentation

Book Description

Securities lending master agreements are vital for covering securities loans between contracting parties. They also offer legal and credit protection and a close-out netting procedure if a party defaults or goes bankrupt. These agreements are widely used by banks, securities houses, pension funds, hedge funds and insurance companies.

Mastering Securities Lending Documentation is a practical guide to understanding the negotiation of these master agreements used in the United Kingdom, United States and Europe. It is an essential handbook for anyone involved in negotiating these agreements and includes:

  • An introduction to the history and operations of the market
  • A clear, user-friendly explanation of all paragraphs of the master agreements
  • An easy-to use split page format with the original text and commentary
  • Examples of commonly negotiated additions and amendments and their implications
  • Answers to legal, risk and operational questions

Table of Contents

  1. Cover
  2. Title
  3. About the author
  4. Contents
  5. Acknowledgements
  6. Publisher’s acknowledgements
  7. Preface
  8. 1 Introduction
    1. History and development of the securities lending market
    2. The short selling controversy
    3. The Lehman Brothers collapse
    4. How a securities lending transaction works
    5. The importance of intermediaries
    6. Reasons and strategies for borrowing securities
    7. How a deal is done from start to finish
    8. Basic tax issues for the UK
    9. Basic tax issues for the US
    10. Risks with securities lending
    11. Differences between repos and securities loans
  9. 2 Legal issues: UK and US perspectives
    1. UK perspective by Paul C. Harding
    2. Legal capacity
    3. Title transfer and recharacterisation risk
    4. The enforceability of close-out netting
    5. Agency arrangements
    6. The English Law securities lending master agreements
    7. The ICMA and SIFMA legal opinions
    8. US perspective by Christian A. Johnson
    9. Enforcement of New York Choice of Law 44 Enforceability of the US Master Securities Loan Agreement
    10. US Bankruptcy and banking insolvency law
    11. FDICIA
    12. Legal capacity
    13. Severability
    14. Use of employee plan assets
  10. 3 The Global Master Securities Lending Agreement (2000)
    1. Paragraph by paragraph analysis of the Global Master Securities Lending Agreement (2000) and its Schedule
    2. Amendments sometimes proposed to the GMSLA 2000
    3. UK Tax Addendum
    4. The Clifford Chance Legal Opinion on the GMSLA 2000
  11. 4 The Global Master Securities Lending Agreement (2010)
    1. ISLA’s Securities Lending Set Off Protocol (March 2009) 188 Introduction to the Global Master Securities Lending Agreement (2010) and main differences from the GMSLA 2000
    2. Paragraph by paragraph analysis of the Global Master Securities Lending Agreement 2010 and its Schedule
    3. Agency Annex
    4. Addendum for Pooled Principal Agency Loans
    5. UK Tax Addendum
  12. 5 The European Master Agreement
    1. Background to the European Master Agreement (the “EMA”)
    2. Goals and benefits of the EMA
    3. Structure of the EMA
    4. Clause by clause analysis of the EMA
    5. Comparison of the EMA with the GMSLA 2010
  13. 6 The US Master Securities Loan Agreement (2000)
    1. Christian A. Johnson
    2. Commentary on the Master Securities Loan Agreement (2000 Version) (the “MSLA”)
    3. Section by section analysis of the MSLA 2000
    4. Annexes to the MSLA 2000
    5. Schedules A and B of the MSLA 2000
  14. 7 The credit crunch and possible future developments in the securities lending market
    1. Origins
    2. What happened?
    3. The current position
    4. Possible future developments
  15. Appendices
    1. APPENDIX 1: A FACSIMILE OF THE GLOBAL MASTER SECURITIES LENDING AGREEMENT (2000) REPRODUCED WITH THE KIND PERMISSION OF THE INTERNATIONAL SECURITIES LENDING ASSOCIATION
    2. APPENDIX 2: A FACSIMILE OF THE GLOBAL MASTER SECURITIES LENDING AGREEMENT (2010) REPRODUCED WITH THE KIND PERMISSION OF THE INTERNATIONAL SECURITIES LENDING ASSOCIATION
    3. APPENDIX 3: A FACSIMILE OF THE EUROPEAN MASTER AGREEMENT REPRODUCED WITH THE KIND PERMISSION OF THE EUROPEAN BANKING FEDERATION
    4. APPENDIX 4: A FACSIMILE OF THE MASTER SECURITIES LOAN AGREEMENT (2000) REPRODUCED BY KIND PERMISSION OF THE SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION
  16. Bibliography
  17. Index
  18. Imprint