Users' questions

What is Gmsla agreement?

What is Gmsla agreement?

The Global Master Securities Lending Agreement (GMSLA) may be used as a standard master agreement for securities lending transactions in the cross-border market. ISLA supports the following master agreements for securities lending transacted under a title transfer arrangement.

How does a Gmsla work?

The GMSLA is structured as a master, or framework, agreement. This means that it can be used to govern multiple securities lending transactions between two parties, rather than having a separate legal agreement for each securities lending transaction. The GMSLA permits either party to perform either role.

What is the purpose of securities lending?

Securities lending involves the owner of shares or bonds transferring them temporarily to a borrower. In return, the borrower transfers other shares, bonds or cash to the lender as collateral and pays a borrowing fee. Securities lending can, therefore, be used to incrementally increase fund returns for investors.

What is the difference between repo and securities lending?

A key difference between repo and securities lending is that the repo market overwhelmingly uses bonds and other fixed-income instruments as collateral, whereas an important segment of the securities lending market is in equities. And securities lending is sometimes used by securities investors to raise cash.

Which is the latest version of the gmsla?

The 2010 version of the GMSLA is the latest variant of the industry standard master agreement for securities lending transactions. This agreement follows the Overseas Securities Lender’s Agreement (‘OSLA’) which was published in 1995, the original GMSLA which was published in 2000, and finally the 2009 version of the

Can a gmsla be used for securities lending?

The Global Master Securities Lending Agreement (GMSLA) may be used as a standard master agreement for securities lending transactions in the cross-border market. ISLA supports the following master agreements for securities lending transacted under a title transfer arrangement.

What are the post default procedures in the gmsla?

MASTER REPURCHASE AGREEMENT A number of post-default procedures have been included in the 2010 GMSLA which are based on the Global Master Repurchase Agreement (‘GMRA’) 2000, including valuation and ‘mini close-out’ provisions. Although the GMSLA and the GMRA are written in different styles and contain differing provisions, these two agreements

Why did Sidley Austin upgrade the gmsla in 2010?

The 2010 version contains a number of amendments in response to concerns that the 2009 version would not be adopted on a sufficiently widespread basis. The upgrades to the GMSLA arise from the need for a periodic update on the one hand, and a need to tackle issues which arose following the Lehman default on the other.