Guidance Notes To The Global Master Securities Lending Agreement (2010 Version)

The documentation compliant with the contract strengthens the day-to-day trading activity in our market, from master contracts such as GMSLA, signed at the beginning of a relationship, to the confirmations of tailored negotiations agreed bilaterally between counterparties. ISLA is currently developing digital versions of its standard market masters. The development of an online digital environment will enable, among other things, companies to create, provide, negotiate and execute documents, as well as collect, process and store data from these documents. Over time, this will be an integral part of any future digitized regulatory reporting system. ISLA wants to work in all sectors to better understand how the digital formats of our masteragrements benefit our members and the wider industry. The non-failing party may prefer to use this provision to trigger securities and cash exchanges rather than make an agreement and pay or receive the net termination amount. ISLA invites members to consult working groups, surveys and forums to ensure that we are well positioned to provide advice and information on legal issues that may affect the securities credit market. The borrower`s obligations under the GMSLA collateral include the payment of commissions, payments made for borrowed securities and the net amount of terminations payable after closing. The security agreement does not guarantee other GMSLA or other trade agreements. The value of the acquired collateral is their fair market value, determined by the lender acting in good faith and in an economically reasonable manner, referring to this information from external or internal sources, as determined by the lender. The provision must be made from or as soon as possible after the date of the acquisition of these securities. Since the early 1990s, ISLA has provided a standard legal framework for the securities lending industry. GMSLA has become a standard legal agreement in European markets, the latest version being the 2018 version of collateral inter-system security.

It was a collaboration between ISLA, its members and Clifford Chance.

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