Stock Loan Agreement Template for Indonesia

The Stock Loan Agreement serves as the primary legal framework for securities lending transactions in the Indonesian market. It is essential for financial institutions engaging in securities lending and borrowing activities, enabling them to manage their portfolios efficiently, facilitate market making, or cover short positions. The agreement must comply with Indonesian regulations, particularly OJK Regulation No. 45/POJK.04/2020, and includes comprehensive provisions for loan terms, collateral management, corporate actions, and default scenarios. This document is typically used by banks, securities companies, and institutional investors operating in Indonesia's capital markets, requiring approval from relevant regulatory authorities and adherence to specific market practices.

1. Parties: Identification of the lender and borrower, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, including the purpose of the stock lending arrangement and the parties' authority to enter into it

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

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

5. Delivery and Return: Procedures and timing for the delivery of loaned securities and their eventual return

6. Collateral: Requirements for collateral, including type, value, maintenance, and margin calls

7. Fees and Payments: Lending fees, payment schedules, and calculation methods

8. Rights and Obligations: Detailed responsibilities of both parties during the loan period

9. Corporate Actions: Handling of dividends, rights issues, and other corporate actions during the loan period

10. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

11. Events of Default: Circumstances constituting default and consequences thereof

12. Termination: Conditions and procedures for early termination or closure of the loan

13. Tax Provisions: Treatment of taxes, including withholding obligations and tax indemnities

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes