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Security Lending Agreement Template for India

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Key Requirements PROMPT example:

Security Lending Agreement

"I need a Security Lending Agreement for our Mumbai-based investment bank to lend equity securities to multiple institutional borrowers, with specific provisions for automated trading platforms and cross-border transactions with Singapore-based entities."

Document background
The Security Lending Agreement serves as a crucial document in India's financial markets, enabling regulated securities lending transactions between institutional parties. This agreement is essential when financial institutions wish to temporarily transfer securities to borrowers in exchange for collateral, while maintaining beneficial ownership. The document must comply with SEBI's Securities Lending Scheme, 1997, and related regulations governing Indian securities markets. It provides a comprehensive framework for managing securities loans, including collateral requirements, corporate actions, rights and obligations of parties, and default procedures. This agreement is particularly relevant for market making, short selling, and settlement failure coverage in Indian financial markets.
Suggested Sections

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

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

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan of Securities: Core terms of the securities lending arrangement, including the process for lending and borrowing

5. Delivery and Return: Procedures for delivery of securities and their return, including timing and method

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

7. Rights and Obligations: Detailed rights and obligations of both lender and borrower

8. Fees and Payments: Lending fees, payment terms, and other financial considerations

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

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

11. Termination: Conditions and procedures for termination of the agreement

12. Indemnification: Indemnification obligations of the parties

13. Notices: Communication procedures and contact details

14. Governing Law and Jurisdiction: Application of Indian law and jurisdiction for disputes

Optional Sections

1. Corporate Actions: Handling of dividends, rights issues, and other corporate actions (for agreements involving equity securities)

2. Tax Provisions: Detailed tax handling procedures and obligations (when parties are subject to different tax jurisdictions)

3. Electronic Trading Platform: Specific provisions for automated lending through electronic platforms (when using automated systems)

4. Intermediary Provisions: Additional terms when involving clearing members or other intermediaries

5. Cross-Border Provisions: Additional requirements for international securities lending

6. Force Majeure: Provisions for extraordinary events affecting market operations

Suggested Schedules

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

2. Schedule 2 - Approved Collateral: Types and specifications of acceptable collateral

3. Schedule 3 - Fee Schedule: Detailed breakdown of fees and charges

4. Schedule 4 - Operating Procedures: Detailed procedures for loan initiation, maintenance, and return

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

6. Appendix A - Contact Details: List of authorized personnel and contact information

7. Appendix B - Required Documentation: List of documents required for compliance and verification

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

Institutional Investment

Brokerage Services

Capital Markets

Relevant Teams

Legal

Compliance

Securities Operations

Risk Management

Trading

Settlement

Portfolio Management

Custody Operations

Finance

Investment

Regulatory Affairs

Relevant Roles

Legal Counsel

Compliance Officer

Securities Operations Manager

Risk Manager

Trading Manager

Settlement Officer

Portfolio Manager

Custody Operations Manager

Chief Financial Officer

Investment Officer

Securities Lending Specialist

Regulatory Affairs Director

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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