Stock Borrowing Agreement Template for Netherlands

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Key Requirements PROMPT example:

Stock Borrowing Agreement

"I need a Stock Borrowing Agreement governed by Dutch law for a transaction between our pension fund and a major investment bank, with specific provisions for automated trading systems and third-party custodian arrangements."

Document background
The Stock Borrowing Agreement serves as the primary legal framework for securities lending transactions in the Netherlands, enabling financial institutions to temporarily acquire securities for various purposes such as settlement coverage, short selling, or market making activities. This document, governed by Dutch law and compliant with EU regulations, establishes the comprehensive legal relationship between the lender and borrower, detailing crucial aspects such as loan initiation, collateral requirements, corporate action treatments, and default procedures. It incorporates necessary provisions to comply with the Dutch Financial Supervision Act (Wft) and relevant EU directives, while addressing practical operational requirements and risk management considerations essential for securities lending operations.
Suggested Sections

1. Parties: Identification of the lender and borrower, including their legal status and registered addresses

2. Background: Context of the agreement and general purpose of the stock borrowing arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Loans of Securities: Core provisions regarding the borrowing of securities, including initiation process and conditions precedent

5. Delivery and Return: Terms governing the delivery of borrowed securities and their eventual return

6. Collateral Requirements: Provisions regarding the posting, maintenance, and return of collateral

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

8. Fees and Charges: Borrowing fees, charges, and payment terms

9. Representations and Warranties: Standard representations and warranties from both parties

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

11. Termination: Provisions for termination of individual loans and the agreement

12. Set-off Rights: Rights of set-off between the parties

13. Notices: Requirements for formal communications between parties

14. Governing Law and Jurisdiction: Choice of Dutch law and jurisdiction provisions

Optional Sections

1. Tax Provisions: Detailed tax provisions, required when parties are in different jurisdictions or specific tax treatments are needed

2. Margin Maintenance: Specific provisions for maintaining margin requirements, needed for more complex arrangements

3. Agency Provisions: Required when either party is acting as agent rather than principal

4. Electronic Trading: Provisions for electronic trading platforms if used

5. Custody Arrangements: Required when involving third-party custodians

6. Market Disruption: Provisions dealing with market disruption events, recommended for longer-term arrangements

7. Force Majeure: Detailed force majeure provisions, recommended for cross-border arrangements

Suggested Schedules

1. Schedule 1 - Form of Loan Confirmation: Standard form for confirming individual loan transactions

2. Schedule 2 - Eligible Securities: List of securities eligible for borrowing under the agreement

3. Schedule 3 - Eligible Collateral: Types of acceptable collateral and relevant haircuts

4. Schedule 4 - Fee Schedule: Detailed fee structure and calculation methods

5. Schedule 5 - Contact Details: Contact information for notices and operational matters

6. Schedule 6 - Systems and Operations: Operational procedures and systems requirements

7. Appendix A - Standard Settlement Instructions: Settlement and payment instructions for both parties

8. Appendix B - Tax Documentation: Required tax forms and documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Banking

Investment Management

Securities Trading

Asset Management

Insurance

Pension Fund Management

Capital Markets

Financial Technology

Relevant Teams

Legal

Compliance

Risk Management

Securities Lending

Trading

Operations

Portfolio Management

Collateral Management

Settlement

Treasury

Investment

Finance

Relevant Roles

Legal Counsel

Securities Lending Manager

Compliance Officer

Risk Manager

Trading Manager

Operations Manager

Portfolio Manager

Collateral Manager

Settlement Officer

Chief Operating Officer

Head of Securities Finance

Treasury Manager

Legal Director

Head of Trading

Investment Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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