Share Lending Agreement for United Arab Emirates

Share Lending Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions under which one party (the lender) temporarily transfers securities to another party (the borrower) in exchange for collateral and fees. The document incorporates UAE securities regulations, including SCA requirements, and addresses key aspects such as delivery mechanisms, collateral management, corporate actions, and default procedures. It ensures compliance with UAE Federal Laws while providing a robust framework for securities lending transactions in the UAE market context.

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What is a Share Lending Agreement?

The Share Lending Agreement serves as a critical document in UAE financial markets, facilitating securities lending transactions while ensuring compliance with local regulations and market practices. This agreement is typically used when financial institutions need to borrow shares for various purposes, including short selling, settlement coverage, or market making activities. The document encompasses detailed provisions for the transfer of securities, collateral arrangements, fee structures, and risk management procedures, all within the framework of UAE securities laws and regulations. As a Share Lending Agreement under UAE jurisdiction, it incorporates specific requirements from the Securities and Commodities Authority (SCA) and other relevant regulatory bodies, making it suitable for both domestic and international financial institutions operating in the UAE markets.

What sections should be included in a Share Lending Agreement?

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

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

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Loan of Securities: Core terms governing the lending of shares, including scope and purpose

5. Delivery and Return: Procedures and timing for delivery and return of borrowed securities

6. Collateral Requirements: Terms relating to collateral posting, maintenance, and return

7. Fees and Payments: Lending fees, payment terms, and other financial considerations

8. Rights and Obligations: Detailed responsibilities of both lender and borrower

9. Representations and Warranties: Standard legal assurances from both parties

10. Events of Default: Circumstances constituting default and consequences

11. Termination: Conditions and procedures for ending the agreement

12. Regulatory Compliance: Compliance with UAE securities laws and regulations

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Specification of UAE law and jurisdiction

15. General Provisions: Standard boilerplate clauses including amendments, assignment, and severability

What sections are optional to include in a Share Lending Agreement?

1. Cross-Border Provisions: Additional terms for international lending arrangements

2. Islamic Finance Compliance: Specific provisions ensuring Shariah compliance if required

3. Corporate Actions: Handling of dividends, rights issues, and other corporate events

4. Tax Provisions: Specific tax handling and gross-up provisions

5. Market Disruption: Procedures for handling market disruption events

6. Agent Provisions: Terms relating to lending agents if applicable

7. Electronic Trading Platform: Provisions for electronic trading and settlement systems

8. Sanctions and Anti-Money Laundering: Additional compliance requirements for international transactions

What schedules should be included in a Share Lending Agreement?

1. Schedule 1 - Form of Loan Notice: Standard form for initiating loan transactions

2. Schedule 2 - Eligible Collateral: List and specifications of acceptable collateral

3. Schedule 3 - Fees Schedule: Detailed breakdown of all applicable fees

4. Schedule 4 - Operating Procedures: Detailed operational procedures for loans and returns

5. Schedule 5 - Form of Power of Attorney: Standard form for execution of rights

6. Schedule 6 - Contact Details: List of authorized personnel and contact information

7. Appendix A - Regulatory Disclosures: Required disclosures under UAE securities laws

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

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Investment Management

Securities Trading

Asset Management

Hedge Funds

Private Equity

Investment Banking

Corporate Finance

Capital Markets

Relevant Teams

Legal

Compliance

Securities Operations

Risk Management

Trading Operations

Portfolio Management

Treasury

Securities Services

Collateral Management

Financial Control

Investment

Corporate Finance

Relevant Roles

Legal Counsel

Compliance Officer

Securities Trading Manager

Risk Manager

Operations Director

Portfolio Manager

Treasury Manager

Securities Lending Specialist

Collateral Manager

Trading Operations Manager

Chief Legal Officer

Head of Securities Services

Financial Controller

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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