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Stock Borrowing Agreement Template for Germany

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Key Requirements PROMPT example:

Stock Borrowing Agreement

"I need a Stock Borrowing Agreement under German law for a bilateral arrangement between our investment bank and a hedge fund, with specific provisions for equity securities and government bonds as collateral, including automated margin call procedures."

Document background
The Stock Borrowing Agreement is essential for financial institutions operating in the German market who engage in securities lending transactions. This document is used when parties need to establish a formal framework for securities borrowing operations, typically to support trading strategies, cover settlement obligations, or facilitate market making activities. The agreement must comply with German financial regulations and civil law requirements, incorporating specific provisions for collateral management, default handling, and regulatory reporting under both German and EU law. It includes detailed operational procedures, risk management requirements, and provisions for corporate actions and income payments on borrowed securities.
Suggested Sections

1. Parties: Identification of the lender and borrower, including their legal status and registered addresses

2. Background: Context of the agreement and brief description of the parties' intentions

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including German law-specific terminology

4. Loans of Securities: Core provisions governing the borrowing and lending of securities, including loan mechanics and procedures

5. Delivery of Securities: Procedures and requirements for the delivery and return of borrowed securities

6. Collateral Requirements: Provisions regarding posting, maintaining, and returning collateral, including margin requirements

7. Rights and Obligations: Detailed rights and obligations of both parties during the term of any securities loan

8. Income and Corporate Actions: Treatment of dividends, interest, and other corporate actions affecting borrowed securities

9. Fees and Charges: Borrowing fees, charges, and payment arrangements

10. Tax Provisions: Basic tax provisions including withholding tax obligations and manufactured payments

11. Events of Default: Definition of events of default and their consequences

12. Close-out and Set-off: Procedures for early termination and settlement of obligations

13. Representations and Warranties: Standard representations and warranties of the parties

14. Regulatory Compliance: Compliance with German and EU securities lending regulations

15. Notices: Communication procedures between parties

16. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction provisions

Optional Sections

1. Agency Lending Provisions: Additional provisions for cases where one party acts as an agent for multiple principals

2. Special Tax Arrangements: Specific tax provisions for cross-border lending or special tax status parties

3. Central Counterparty Provisions: Additional provisions for clearing through a CCP

4. Electronic Trading Platform: Provisions for using specific trading platforms or electronic systems

5. Market Making Activities: Special provisions for borrowers engaging in market making

6. Automatic Loan Generation: Provisions for automated borrowing arrangements

7. Triparty Arrangements: Provisions for involving a triparty collateral agent

8. Non-Standard Collateral: Provisions for accepting non-cash, non-government securities as collateral

Suggested Schedules

1. Schedule 1 - Eligible Securities: List of securities eligible for borrowing under the agreement

2. Schedule 2 - Eligible Collateral: Types of acceptable collateral and associated haircuts

3. Schedule 3 - Fee Schedule: Detailed fee arrangements and calculation methodologies

4. Schedule 4 - Operating Procedures: Detailed operational procedures for borrowing, returns, and collateral management

5. Schedule 5 - Form of Loan Confirmation: Standard form for confirming individual loan transactions

6. Schedule 6 - Contact Details: Contact information for notices, operations, and escalations

7. Appendix A - Standard Settlement Instructions: Settlement and account details for both parties

8. Appendix B - Tax Documentation: Required tax forms and documentation

9. Appendix C - Reporting Templates: Templates for required regulatory and operational reporting

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

































































Clauses



































Relevant Industries

Financial Services

Banking

Investment Management

Securities Trading

Asset Management

Insurance

Pension Fund Management

Prime Brokerage

Custody Services

Relevant Teams

Legal

Compliance

Trading

Operations

Risk Management

Portfolio Management

Securities Finance

Settlement

Client Services

Product Management

Documentation

Regulatory Reporting

Relevant Roles

Securities Lending Trader

Trading Operations Manager

Legal Counsel

Compliance Officer

Risk Manager

Portfolio Manager

Securities Operations Specialist

Collateral Manager

Settlement Officer

Relationship Manager

Product Manager - Securities Lending

Chief Trading Officer

Head of Securities Finance

Legal Documentation Specialist

Regulatory Reporting Officer

Industries









Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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