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The Security Lending Agreement serves as the primary contractual framework for securities lending transactions in the New Zealand market. This document is essential when financial institutions wish to establish ongoing securities lending arrangements, whether for covering short positions, supporting trading strategies, or generating additional revenue from securities holdings. The agreement must comply with New Zealand's regulatory framework, particularly the Financial Markets Conduct Act 2013 and the Personal Property Securities Act 1999. It includes comprehensive provisions for loan initiation, collateral management, corporate actions, tax treatments, and default scenarios. The document is typically used by financial institutions, including banks, asset managers, pension funds, and broker-dealers, and requires careful consideration of both legal and operational aspects of securities lending transactions.

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

2. Background: Context of the agreement and general purpose of the securities lending arrangement

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

4. Loans of Securities: Core provisions governing the lending and borrowing of securities, including initiation process and conditions precedent

5. Transfer of Securities: Procedures and requirements for the transfer of securities between parties

6. Collateral Requirements: Provisions regarding the posting, maintenance, and return of collateral

7. Margin Maintenance: Rules for calculating and maintaining margin requirements throughout the lending period

8. Income and Corporate Actions: Treatment of dividends, interest, rights issues, and other corporate actions

9. Manufactured Payments: Provisions for payments in lieu of dividends or other distributions

10. Tax: Treatment of withholding tax and other tax implications

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

12. Close-out and Set-off: Procedures for terminating loans and settling obligations following default

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

14. Covenants: Ongoing obligations of the parties during the agreement

15. Indemnity and Limitation of Liability: Scope of indemnities and limitations on liability

16. Termination: Provisions for termination of the agreement and individual loans

17. Notices: Requirements for giving notices under the agreement

18. Governing Law and Jurisdiction: New Zealand law as governing law and jurisdiction provisions

19. General Provisions: Standard boilerplate provisions including amendments, assignments, and severability