Share Loan Agreement for Australia

Share Loan Agreement Template for Australia

An Australian law-governed agreement that establishes the terms and conditions for the temporary loan of shares from one party (the lender) to another (the borrower). The document covers the loan terms, security arrangements, rights and obligations of the parties, treatment of corporate actions, default provisions, and regulatory compliance requirements under Australian law, particularly the Corporations Act 2001 and related financial services legislation. It includes comprehensive provisions for share transfers, dividend handling, and return obligations, while ensuring compliance with Australian securities regulations and market practices.

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What is a Share Loan Agreement?

The Share Loan Agreement is a specialized financial instrument used in Australian financial markets to facilitate the temporary transfer of share ownership between parties. This document is essential for transactions involving securities lending, market making, short selling, and other strategic trading activities. It complies with Australian regulatory requirements, including the Corporations Act 2001, ASIC regulations, and relevant financial services laws. The agreement typically includes detailed provisions for share transfer mechanisms, dividend treatments, voting rights, security arrangements, and default scenarios. It's particularly important for financial institutions, investment firms, and sophisticated investors operating in the Australian market who need to document share lending arrangements in a comprehensive and compliant manner.

What sections should be included in a Share Loan Agreement?

1. Parties: Identifies and provides full details of the lender and borrower

2. Background: Sets out the context of the agreement and the parties' intentions

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles

4. Loan and Purpose: Specifies the shares being loaned, loan period, and permitted purpose

5. Security Arrangements: Details the security interest over the shares and any additional security

6. Delivery and Return of Shares: Procedures for transferring shares at start and end of loan

7. Payments and Distributions: Handling of dividends, rights issues, and other corporate actions

8. Representations and Warranties: Key statements of fact and capacity by both parties

9. Undertakings: Ongoing obligations of the parties during the loan period

10. Events of Default: Circumstances constituting default and consequences

11. Enforcement: Rights and procedures following an event of default

12. Costs and Taxes: Allocation of transaction costs and tax obligations

13. Notices: Communication procedures between parties

14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, etc.

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

1. Security Trustee Provisions: Required when there are multiple lenders and a security trustee structure

2. Retail Client Protections: Additional provisions required when the borrower is a retail client

3. Guarantee: When a third-party guarantee is required for the loan

4. Additional Security: When other assets are provided as security besides the shares

5. Market-Making Provisions: When shares are being borrowed for market-making purposes

6. Custody Arrangements: When a third-party custodian is involved

7. Margin Maintenance: When ongoing margin requirements apply to the loan

8. Securities Lending Arrangements: When the agreement needs to comply with standard securities lending practices

What schedules should be included in a Share Loan Agreement?

1. Schedule 1 - Share Details: Details of the shares being loaned including company name, class, quantity, and any identifying numbers

2. Schedule 2 - Fee Schedule: Details of all fees, charges, and interest arrangements

3. Schedule 3 - Transfer Procedures: Detailed procedures for transferring shares and updating registers

4. Schedule 4 - Form of Transfer: Standard share transfer form to be used

5. Schedule 5 - Security Documents: Forms of any security documents required

6. Schedule 6 - Conditions Precedent: List of documents and conditions required before loan effectiveness

7. Appendix A - Regulatory Compliance Checklist: Checklist ensuring compliance with relevant regulations

8. Appendix B - Required Notices and Forms: Templates for notices and forms required during the loan period

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

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Cost

Free to use
Relevant legal definitions
Relevant Industries

Financial Services

Investment Banking

Securities Trading

Wealth Management

Asset Management

Professional Services

Corporate Finance

Investment Management

Stockbroking

Private Banking

Relevant Teams

Legal

Compliance

Securities Operations

Trading

Portfolio Management

Risk Management

Corporate Finance

Investment

Securities Lending

Custody Operations

Finance

Settlements

Company Secretariat

Regulatory Affairs

Relevant Roles

Legal Counsel

Compliance Officer

Securities Operations Manager

Trading Manager

Portfolio Manager

Risk Manager

Corporate Finance Manager

Investment Director

Securities Lending Specialist

Custody Operations Manager

Financial Controller

Chief Investment Officer

Settlements Manager

Company Secretary

Regulatory Affairs Manager

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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