Stock Loan Agreement Template for United Arab Emirates

The Stock Loan Agreement is essential for financial institutions operating in the UAE's securities markets, facilitating temporary transfers of securities while ensuring compliance with local regulations and market practices. This document is typically used when financial institutions need to borrow securities for various purposes, including short selling, settlement coverage, or market-making activities. The agreement must comply with UAE Securities and Commodities Authority (SCA) regulations and may need to consider Islamic finance principles depending on the parties involved. It details crucial aspects such as loan terms, collateral requirements, rights and obligations of parties, fee structures, and default provisions, while incorporating specific UAE market considerations and international best practices in securities lending.

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

2. Background: Context of the agreement, including the purpose of the stock lending arrangement and basic commercial understanding

3. Definitions: Detailed definitions of terms used throughout the agreement, including financial, technical, and legal terms

4. Loan of Securities: Core provisions regarding the lending and borrowing of securities, including transfer mechanisms

5. Delivery of Securities: Procedures and timing for the delivery of securities from lender to borrower

6. Collateral Requirements: Details of collateral to be provided, including type, value, and maintenance requirements

7. Rights and Obligations: Specific rights and obligations of both parties during the loan period

8. Interest and Fees: Terms regarding lending fees, interest calculations, and payment arrangements

9. Distributions and Corporate Actions: Handling of dividends, rights issues, and other corporate actions during the loan period

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

11. Termination: Conditions and procedures for terminating the agreement

12. Representations and Warranties: Standard and specific representations made by each party

13. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction provisions