Security Lending Agreement Template for Indonesia

The Security Lending Agreement serves as the primary contractual framework for securities lending transactions in the Indonesian market. This document is essential when financial institutions wish to engage in securities lending and borrowing activities under Indonesian jurisdiction, ensuring compliance with OJK Regulation No. 37/POJK.04/2018 and related financial regulations. The agreement covers critical aspects including loan initiation, collateral management, corporate actions, fee structures, and default scenarios. It is designed to protect both lenders and borrowers while promoting market liquidity and efficiency in Indonesia's capital markets. The document incorporates specific requirements of Indonesian law while maintaining alignment with international securities lending practices, making it suitable for both domestic and cross-border transactions.

1. Parties: Identification of the lender and borrower, including their legal status and authority to enter into the agreement

2. Background: Context of the agreement and brief description of the parties' intentions

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

4. Loans of Securities: Core terms governing the lending of securities, including initiation procedures and confirmation requirements

5. Delivery of Securities: Procedures and timing for the delivery of securities between parties

6. Collateral Requirements: Terms regarding the provision, maintenance, and adjustment of collateral

7. Mark to Market: Procedures for daily valuation and margin maintenance

8. Income and Corporate Actions: Treatment of dividends, interest, and other corporate actions affecting the loaned securities

9. Fees and Charges: Lending fees, charges, and payment terms

10. Tax Provisions: Tax obligations and withholding requirements

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

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

13. Termination: Conditions and procedures for termination of loans and the agreement

14. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

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