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Share Loan Agreement Template for England and Wales

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Key Requirements PROMPT example:

Share Loan Agreement

"I need a Share Loan Agreement for a 6-month loan of 100,000 ordinary shares in a FTSE 100 company, with quarterly dividend payments to be passed back to the lender and standard market collateral requirements."

Document background
The Share Loan Agreement is a specialized financial instrument used when parties need to temporarily transfer share ownership while maintaining economic interests. Common in securities lending and trading strategies, this agreement type is particularly relevant in the UK financial markets. The document comprehensively covers share transfer mechanics, voting rights, dividends, corporate actions, and regulatory requirements under English and Welsh law. It's essential for activities such as short selling, settlement coverage, and market making, providing legal certainty and risk management framework for all parties involved.
Suggested Sections

1. Parties: Identification of the lender and borrower

2. Background: Context and purpose of the share loan arrangement

3. Definitions: Key terms used throughout the agreement

4. Loan of Shares: Core terms of the share loan including quantity, class, and company details

5. Term: Duration of the loan agreement

6. Delivery and Return: Mechanics for transfer of shares and their return

7. Fees and Costs: Any fees payable for the share loan

8. Rights and Obligations: Parties' respective rights and obligations during the loan period

9. Events of Default: Circumstances constituting default and consequences

10. Governing Law and Jurisdiction: Confirmation of applicable law and courts

Optional Sections

1. Collateral: Terms relating to any security provided - include when security is required for the share loan

2. Corporate Actions: Handling of dividends, rights issues etc. - include when specific arrangements for corporate actions are needed

3. Tax Provisions: Specific tax-related terms - include when complex tax implications exist

4. Regulatory Compliance: Additional regulatory requirements - include when parties are regulated entities

Suggested Schedules

1. Schedule 1 - Share Details: Detailed description of shares being loaned

2. Schedule 2 - Form of Transfer: Standard form for share transfers

3. Schedule 3 - Fees: Detailed fee structure and calculations

4. Schedule 4 - Notices: Contact details and notice requirements

5. Appendix A - Required Documentation: List of required supporting documents

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
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company law in the UK, particularly relevant for share transfers, shareholder rights, and corporate governance requirements

Financial Services and Markets Act 2000: Key legislation regulating financial services and markets in the UK, establishing regulatory framework for financial activities

Consumer Credit Act 1974: Legislation governing consumer credit agreements, may be relevant if parties include individual borrowers

FCA Regulations: Financial Conduct Authority regulations governing conduct and compliance in financial services sector

PRA Requirements: Prudential Regulation Authority requirements focusing on financial stability and prudential regulations

Market Abuse Regulation: Regulations preventing market abuse and insider trading in financial markets

Securities Financing Transactions Regulation: Specific regulations governing securities financing transactions including share lending

Common Law Contract Principles: Fundamental principles of contract law including offer, acceptance, consideration, and intention to create legal relations

Income Tax Act 2007: Tax legislation relevant for income arising from share loan transactions

Corporation Tax Act 2010: Tax legislation governing corporate taxation aspects of share lending

Financial Collateral Arrangements (No 2) Regulations 2003: Regulations governing financial collateral arrangements in security transactions

Law of Property Act 1925: Legislation relevant to security arrangements and property rights in financial transactions

EU Retained Law: Former EU legislation retained in UK law post-Brexit affecting securities and financial services

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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