Stock Lending Agreement Template for Switzerland

The Stock Lending Agreement is a critical document used in Swiss financial markets to facilitate the temporary transfer of securities between financial institutions. It is particularly relevant when institutions need to cover short positions, support market-making activities, or generate additional revenue from their securities holdings. The agreement must comply with Swiss regulatory requirements, including FINMA regulations, the Federal Act on Financial Market Infrastructures, and the Swiss Federal Code of Obligations. It includes detailed provisions for collateral management, risk mitigation, corporate actions processing, and default handling. This document is essential for financial institutions operating in Switzerland and must incorporate specific Swiss legal requirements regarding financial contracts, securities transfers, and regulatory reporting obligations.

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

2. Background: Context of the agreement, establishing the parties' intentions to enter into securities lending transactions

3. Definitions: Comprehensive list of defined terms used throughout the agreement

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

5. Transfer of Securities: Mechanics and procedures for transferring securities between parties

6. Collateral Requirements: Provisions regarding posting, maintaining, and returning collateral, including margin requirements

7. Income and Corporate Actions: Treatment of dividends, interest, rights issues and other corporate actions affecting borrowed securities

8. Fees and Charges: Lending fees, rates, payment mechanisms and timing

9. Tax Provisions: Treatment of withholding tax, tax credits, and manufactured payments

10. Representations and Warranties: Standard representations by both parties regarding capacity, authority, and compliance

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

12. Termination: Provisions for ending individual loans and the agreement itself

13. Set-off Rights: Rights to set off obligations between parties

14. Governing Law and Jurisdiction: Swiss law as governing law and jurisdiction provisions