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Equity Loan Agreement Template for Switzerland

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Key Requirements PROMPT example:

Equity Loan Agreement

"I need a Swiss-law Equity Loan Agreement between our bank (acting as lender) and a German pension fund (as borrower), with specific provisions for cross-border transactions and automated collateral management through SIX Securities Services, planned to be effective from March 1, 2025."

Document background
The Equity Loan Agreement is a sophisticated financial instrument used in the Swiss market to facilitate securities lending transactions between financial institutions. This document is essential when parties wish to establish a framework for the temporary transfer of equity securities, typically for purposes such as short selling, settlement coverage, or market making activities. The agreement must comply with Swiss regulatory requirements, including the Swiss Code of Obligations and financial market regulations. It details crucial aspects such as the transfer mechanism, collateral arrangements, corporate action handling, and risk management procedures. The document is particularly important in the Swiss financial center, where securities lending plays a vital role in maintaining market liquidity and efficiency. The Equity Loan Agreement includes specific provisions addressing Swiss regulatory compliance, tax implications, and established market practices in the Swiss financial sector.
Suggested Sections

1. Parties: Identification of the lender and borrower, including their full legal names, registration details, and addresses

2. Background: Context of the agreement and brief description of the parties' intentions regarding the equity loan arrangement

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Loan of Securities: Core terms of the securities loan, including identification of securities, loan period, and transfer mechanisms

5. Delivery and Return: Procedures and timing for the delivery of loaned securities and their eventual return

6. Collateral: Requirements for collateral, including type, value, maintenance, and margin calls

7. Fees and Payments: Loan fees, payment schedules, and calculation methods

8. Corporate Actions: Treatment of dividends, rights issues, and other corporate actions during the loan period

9. Representations and Warranties: Standard representations and warranties from both parties

10. Tax Provisions: Treatment of taxes, including withholding tax and manufactured dividends

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

12. Termination: Circumstances and procedures for early termination

13. Governing Law and Jurisdiction: Confirmation of Swiss law governance and jurisdiction for disputes

14. Notices: Communication procedures and contact details

15. General Provisions: Standard boilerplate clauses including severability, amendments, and entire agreement

Optional Sections

1. Regulatory Compliance: Specific provisions addressing compliance with Swiss financial regulations, used when parties are regulated entities

2. Multiple Borrowers/Lenders: Additional provisions for agreements involving multiple parties on either side

3. Cross-Border Provisions: Special provisions for international transactions, including conflict of laws

4. Electronic Trading Platform: Provisions for agreements executed through electronic platforms

5. Custody Arrangements: Specific provisions when involving third-party custodians

6. Netting Arrangements: Provisions for netting of obligations, used in more complex lending relationships

7. Agency Provisions: Required when one or more parties act as agents rather than principals

8. Credit Support: Additional credit support arrangements beyond standard collateral requirements

Suggested Schedules

1. Schedule 1 - Loaned Securities: Detailed description of the securities to be loaned, including ISIN numbers and quantities

2. Schedule 2 - Fee Schedule: Detailed breakdown of fees, calculation methods, and payment terms

3. Schedule 3 - Collateral Requirements: Specific collateral parameters, including haircuts and eligible collateral types

4. Schedule 4 - Operating Procedures: Detailed procedures for transfers, corporate actions, and communications

5. Appendix A - Form of Loan Confirmation: Template for confirming individual loan transactions

6. Appendix B - Notice Details: Detailed contact information and notice requirements for both parties

7. Appendix C - Tax Documentation: Required tax forms and declarations

8. Appendix D - Settlement Instructions: Detailed instructions for securities and collateral transfers

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 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

Financial Technology

Investment Banking

Wealth Management

Capital Markets

Relevant Teams

Legal

Compliance

Trading Operations

Risk Management

Portfolio Management

Securities Operations

Collateral Management

Trading

Settlement

Financial Control

Securities Finance

Regulatory Reporting

Investment

Treasury

Middle Office

Relevant Roles

Securities Lending Manager

Legal Counsel

Compliance Officer

Trading Operations Manager

Risk Manager

Portfolio Manager

Securities Operations Specialist

Collateral Manager

Trading Desk Manager

Settlement Officer

Financial Controller

Head of Securities Finance

Regulatory Reporting Officer

Investment Director

Chief Investment 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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