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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."
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
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
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
Financial Services
Banking
Investment Management
Securities Trading
Asset Management
Insurance
Pension Fund Management
Prime Brokerage
Custody Services
Legal
Compliance
Trading
Operations
Risk Management
Portfolio Management
Securities Finance
Settlement
Client Services
Product Management
Documentation
Regulatory Reporting
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
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