On the Commencement of the Loan
Typically a collateral giver will undertake to deliver to, or deposit, collateral prior to close-of-business on an agreed date in order to cover any new loan. That agreed date may be the loan settlement date or prior date depending on type or location of the loan security.
If a collateral fails to be delivered, counterparts may agree to the provision of alternative collateral within standard market deadlines, dependant on the type of collateral.
If market deadlines for securities collateral are passed, parties should avoid any overnight exposure by holding back settlement of new loans. (IBP-193 UNDER ISLA REVIEW)
Already a member? Login to your account
Interested in Becoming a Member?
ISLA’s members span the breadth and depth of the securities lending industry, and there are many benefits of joining the Association’s network.Become a member today