The Margin Lending Agreement serves as the primary document governing the extension of credit by financial institutions to investors for securities trading in South Africa. This agreement is essential when investors seek to leverage their existing securities portfolio or require additional funding for trading activities. The document must comply with South African financial regulations, particularly the Financial Markets Act (No. 19 of 2012) and National Credit Act (No. 34 of 2005). It outlines crucial elements including credit limits, margin requirements, eligible collateral, interest rates, and enforcement mechanisms. The agreement is designed to protect both lender and borrower interests while ensuring transparent risk disclosure and compliance with local regulatory requirements. It includes specific provisions for margin calls, collateral valuation, and default scenarios, making it a fundamental tool for secured lending in the South African securities market.

1. Parties: Identifies and defines the lender and borrower, including their legal details and capacities

2. Background: Sets out the context of the agreement and the intention of the parties to enter into a margin lending arrangement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Facility and Purpose: Details of the margin lending facility, including amount, purpose, and availability

5. Interest and Fees: Specifies interest rates, calculation methods, fees, and payment terms

6. Margin Requirements: Establishes initial and maintenance margin requirements, margin calls, and valuation methods

7. Security Arrangements: Details the collateral requirements, eligible securities, and security interest provisions

8. Representations and Warranties: Standard and specific representations and warranties from both parties

9. Undertakings: Ongoing obligations of the borrower including financial covenants and reporting requirements

10. Events of Default: Defines circumstances constituting default and consequences thereof

11. Enforcement Rights: Outlines the lender's rights and remedies upon default, including selling collateral

12. Administrative Provisions: Covers operational aspects like notices, calculations, and account management

13. Term and Termination: Duration of the agreement and circumstances for termination

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