GMSLA
GMSLA 2010 Clause Memory Map
Visual one-page summary for attorney review
Section 1 — Core Flow
1. Applicability
Master agreement governing securities lending transactions; can be amended by schedule, addenda, annexes.
2. Interpretation
Definitions, Market Value, Base Currency, Business Day, FX conversion.
3. Loans of Securities
Framework for each loan; confirmations usually evidence rather than replace agreed terms.
4. Delivery
Outright transfer of securities and collateral; equivalent securities/collateral returned later; clean title.
5. Collateral
Borrower posts collateral; substitution, mark-to-market, margin calls, excess return, timing, letters of credit.
6. Distributions & Corporate Actions
Manufactured payments, securities distributions, non-cash collateral income, voting, corporate action instructions.
7. Rates
Borrower pays lending fee; lender may pay interest on cash collateral; monthly accrual/payment timing.
8. Delivery of Equivalent Securities
Recall/termination rights; borrower returns equivalent securities, lender returns equivalent collateral; reciprocal delivery.
Section 2 — Failure / Default Path
9. Failure to Deliver
Not itself an Event of Default; affected loan may continue or be mini close-out terminated; direct costs recoverable.
10. Events of Default
Events below trigger Clause 11 rights, subject to grace periods.
| Event | Description | Grace |
|---|---|---|
| 10.1(a) | Failure to pay/repay cash collateral; failure to deliver start or further collateral. | None |
| 10.1(b) | Failure to make manufactured payments for loaned securities or non-cash collateral. | 3 Business Days |
| 10.1(c) | Failure to pay sums due under mini close-out provisions. | None |
| 10.1(d) | Act of Insolvency. | None |
| 10.1(e) | Warranty incorrect or untrue in a material respect. | None |
| 10.1(f) | Admission of non-performance where it would be a potential default. | None |
| 10.1(g) | Transfer of material assets to a trustee. | None |
| 10.1(h) | Regulatory/exchange action for failure to meet financial resources or credit rating requirements. | None |
| 10.1(i) | Breach of any other obligation. | 30 days |
Notice required for all; for 10.1(d), no notice if automatic early termination is elected.
11. Consequences of Event of Default
Accelerate obligations; determine Default Market Value / Net Value; set off; single net cash amount; legal/professional expenses and interest recoverable.
Section 3 — Economic / Credit Risk Controls
12. Taxes
Withholding, gross-up, tax cooperation, stamp and transfer taxes, VAT/sales tax, retrospective law rule.
13. Lender’s Warranties
Authority, capacity, ability to transfer securities, principal/agent status.
14. Borrower’s Warranties
Authority, approvals, capacity, ability to transfer collateral, principal status, no primary voting-rights purpose.
15. Interest on Outstanding Payments
Default interest on unpaid sums.
16. Termination of Agreement
Either party may terminate on 15 business days’ written notice; existing loan obligations survive.
17. Single Agreement
All loans form one contractual relationship; supports close-out netting and prevents cherry-picking.
Section 4 — Boilerplate 18–27
Section 5 — Schedule & Annexes
Schedule
- Acceptable collateral, margins, base currency, business-day places.
- Market-value timing, automatic early termination election.
- Notices, process agent, default interest, legacy trades, vendor automation.
Agency Annex
- Lender may act as agent.
- Disclosure, authority, principal identification.
- Separate-agreement treatment.
Addendum for Pooled Principal Loans
- Multiple principals.
- Allocation of loans/collateral.
- Pooled exposure rebalancing.
UK Tax Addendum
- UK manufactured payment tax rules.
- Gross-up modifications.
- Warranties, AUKI/AUKCA status.
- Reverse charge and agency nuances.