Stock Loan Agreement for Singapore

Stock Loan Agreement Template for Singapore

A Stock Loan Agreement under Singapore law is a legally binding document that establishes the terms and conditions for the temporary transfer of securities from a lender to a borrower. The agreement is governed by Singapore's Securities and Futures Act and regulated by the Monetary Authority of Singapore. It details the obligations of both parties, including collateral requirements, fees, corporate action treatments, and default provisions, while ensuring compliance with Singapore's robust financial regulatory framework.

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What is a Stock Loan Agreement?

A Stock Loan Agreement is essential for facilitating securities lending transactions in Singapore's financial markets. This document is used when one party wishes to temporarily transfer securities to another, typically for purposes such as short selling, covering settlement failures, or supporting trading strategies. The agreement must comply with Singapore's regulatory requirements, particularly the Securities and Futures Act and MAS guidelines. It includes detailed provisions for loan terms, collateral management, corporate actions, and default scenarios, providing a comprehensive framework for securities lending operations within Singapore's jurisdiction.

What sections should be included in a Stock Loan Agreement?

1. Parties: Identification of lender and borrower

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

3. Definitions: Key terms used throughout the agreement including regulatory definitions under SFA

4. Loans of Securities: Core provisions regarding the lending arrangement, compliance with SFA requirements

5. Delivery of Securities: Process and timing of securities transfer, CDP requirements

6. Collateral Requirements: Details of required collateral and maintenance as per MAS guidelines

7. Fees and Charges: Lending fees, charges and treatment of manufactured payments

8. Events of Default: Circumstances constituting default and consequences under Singapore law

9. Termination: Provisions for ending the agreement and post-termination obligations

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

1. Corporate Actions: Handling of dividends, rights issues and other corporate actions when lending involves shares

2. Tax Provisions: Specific tax treatments under Singapore tax law, including stamp duty considerations

3. Agency Provisions: Additional terms when either party acts as agent under Singapore law

4. Anti-Money Laundering: AML/CFT compliance requirements as per MAS Notice SFA04-N02

What schedules should be included in a Stock Loan Agreement?

1. Schedule 1: Form of Loan Confirmation: Standard form for confirming individual loans in compliance with Singapore requirements

2. Schedule 2: Eligible Securities: List of securities eligible for lending under Singapore regulations

3. Schedule 3: Collateral Parameters: Detailed collateral requirements and calculations as per MAS guidelines

4. Schedule 4: Agency Terms: Specific terms for agency arrangements under Singapore law

5. Appendix A: Standard Settlement Instructions: Details of settlement procedures and CDP account information

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

Singapore

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Securities and Futures Act (SFA): Primary legislation governing securities and futures markets in Singapore (Chapter 289). Covers securities lending, licensing requirements, disclosure obligations, and market conduct requirements.

MAS Guidelines and Notices: Regulatory framework including MAS Notice SFA 04-N13 on Risk Based Capital Adequacy Requirements and other guidelines issued by the Monetary Authority of Singapore for securities lending activities.

Securities and Futures (Financial and Margin Requirements) Regulations: Specific regulations governing financial and margin requirements for securities lending transactions in Singapore.

Companies Act: Chapter 50 of Singapore laws, relevant for corporate aspects and security interests in stock loan transactions.

Personal Property Securities Act: Legislation governing the creation and enforcement of security interests in personal property, including securities.

Bankruptcy Act: Relevant for default scenarios and insolvency proceedings in stock loan agreements.

Income Tax Act: Tax legislation governing the treatment of income, including manufactured payments and dividends in securities lending.

Stamp Duties Act: Legislation governing stamp duties applicable to securities transactions and transfers.

CDP Rules: Rules and requirements of the Central Securities Depository governing securities settlement and custody.

SGX Trading Rules: Singapore Exchange trading rules and requirements applicable to securities lending transactions.

GMSLA Principles: Global Master Securities Lending Agreement principles that influence international securities lending practices.

AML/CFT Requirements: Anti-Money Laundering and Countering the Financing of Terrorism requirements, including MAS Notice SFA04-N02.

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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