Margin Lending Agreement Template for Netherlands

This Margin Lending Agreement is designed for use in the Netherlands, establishing the legal framework for margin lending facilities between financial institutions and their clients. It is particularly relevant when a lender provides credit against a portfolio of financial instruments as collateral, requiring careful consideration of Dutch financial regulations and EU directives. The agreement addresses key aspects such as margin calculations, collateral requirements, and default procedures while ensuring compliance with the Dutch Financial Supervision Act (Wft) and European regulations including MiFID II. It is suitable for various lending scenarios, from institutional clients to retail investors, with appropriate regulatory safeguards and risk management provisions incorporated throughout.

1. Parties: Identification of the lender and borrower, including their registered details and regulatory status

2. Background: Context of the agreement and relationship between parties

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement, including financial terms and calculation methodologies

4. Facility and Purpose: Details of the margin lending facility, including maximum amount and permitted purposes

5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

6. Margin Requirements: Rules for calculating initial and maintenance margin requirements, including eligible collateral

7. Collateral Arrangements: Provisions regarding the posting, maintenance, and withdrawal of collateral

8. Interest and Fees: Interest calculation methodology, payment terms, and applicable fees

9. Margin Calls and Valuation: Procedures for margin calls, timing, and valuation of collateral

10. Representations and Warranties: Standard and specific representations and warranties from both parties

11. Covenants: Ongoing obligations of the borrower, including financial covenants and reporting requirements

12. Events of Default: Circumstances constituting default and consequences

13. Enforcement and Close-out: Rights and procedures following an event of default

14. Payment and Calculations: Payment mechanics, calculation periods, and currency provisions

15. Term and Termination: Duration of the agreement and termination rights

16. Miscellaneous: Standard boilerplate provisions including notices, amendments, and governing law