Security Loan Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Security Loan Agreement

"I need a Securities Loan Agreement governed by Hong Kong law for a financial institution lending Hong Kong-listed equities to multiple hedge fund borrowers, with specific provisions for automated trading platforms and cross-border collateral arrangements."

Document background
The Security Loan Agreement is a critical document used in Hong Kong's financial markets to facilitate securities lending transactions between financial institutions, investment firms, and other eligible market participants. This agreement type is essential for various business purposes, including short selling, coverage of settlement failures, and market-making activities. The document must comply with Hong Kong's regulatory requirements, particularly those set by the Securities and Futures Commission (SFC), and typically includes detailed provisions on securities transfer, collateral management, risk mitigation, and default handling. The agreement is structured to protect both lender and borrower interests while ensuring market efficiency and regulatory compliance. Given Hong Kong's status as a major financial center, these agreements often incorporate international best practices while adhering to local legal requirements.
Suggested Sections

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

2. Background: Context of the agreement and general purpose of the securities lending arrangement

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and interpretation rules

4. Loan of Securities: Core provisions regarding the lending of securities, including process and conditions

5. Delivery of Securities: Procedures and requirements for the delivery of loaned securities

6. Collateral Requirements: Details of required collateral, including type, value, and maintenance requirements

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

8. Rights and Obligations: Detailed responsibilities of each party during the loan period

9. Representations and Warranties: Standard and specific representations made by each party

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

11. Termination: Conditions and process for terminating the agreement

12. Regulatory Compliance: Obligations to comply with relevant regulations and reporting requirements

13. Governing Law and Jurisdiction: Hong Kong law as governing law and jurisdiction details

14. Notices: Process and requirements for formal communications between parties

15. General Provisions: Standard boilerplate provisions including amendments, assignments, and severability

Optional Sections

1. Tax Provisions: Specific tax considerations and obligations - include when cross-border elements exist

2. Multiple Parties: Additional provisions for multiple lenders or borrowers - include when more than two parties are involved

3. Agency Provisions: Provisions for when one party acts as agent - include when involving agency arrangements

4. Corporate Actions: Handling of dividends, voting rights, and other corporate actions - include for equity securities

5. Market Disruption: Provisions for market disruption events - include for volatile securities or markets

6. Netting Arrangements: Provisions for netting of obligations - include when parties have multiple transactions

7. Electronic Trading Platform: Provisions relating to electronic trading systems - include when using automated platforms

Suggested Schedules

1. Schedule 1 - Eligible Securities: List and details of securities eligible for lending under the agreement

2. Schedule 2 - Eligible Collateral: Approved types of collateral and their respective haircuts

3. Schedule 3 - Fee Schedule: Detailed breakdown of fees, charges, and payment calculations

4. Schedule 4 - Operating Procedures: Detailed procedures for loans, recalls, and deliveries

5. Schedule 5 - Form of Loan Confirmation: Template for confirming individual loan transactions

6. Schedule 6 - Contact Details: Contact information for authorized representatives and notices

7. Schedule 7 - Supplemental Terms: Any jurisdiction-specific or special terms

8. Appendix A - Required Documentation: List of required supporting documents and regulatory filings

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

Investment Banking

Asset Management

Securities Trading

Hedge Funds

Private Banking

Institutional Banking

Capital Markets

Wealth Management

Investment Management

Relevant Teams

Legal

Compliance

Trading

Operations

Risk Management

Portfolio Management

Treasury

Securities Operations

Documentation

Settlement

Regulatory Affairs

Investment Management

Collateral Management

Relevant Roles

Securities Lending Manager

Trading Director

Compliance Officer

Legal Counsel

Risk Manager

Portfolio Manager

Operations Director

Collateral Manager

Investment Officer

Chief Investment Officer

Treasury Manager

Senior Trader

Regulatory Compliance Manager

Documentation Specialist

Settlement Officer

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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