The Global Master Securities Lending Agreement (GMSLA) is a legal document that outlines the terms and conditions of securities lending transactions between financial institutions. First released in 2000, GMSLA has undergone several updates, with the most recent version being the GMSLA 2010.
The GMSLA provides a standardized framework for securities lending transactions, which helps to reduce the risk and cost associated with such transactions. It is widely used by financial institutions around the world, including banks, brokerage firms, and insurance companies.
One of the key features of the GMSLA 2010 is the inclusion of new collateral provisions, which provide additional protection to lenders. Under these provisions, borrowers are required to provide collateral that meets certain criteria, such as being liquid and readily transferable. This helps to minimize the risk of the lender losing money in the event of a default by the borrower.
Another important feature of the GMSLA 2010 is the ability for parties to customize certain terms of the agreement. This allows for greater flexibility in the negotiation of securities lending transactions, while still providing a standard framework for the overall transaction.
Overall, the GMSLA 2010 is an important tool for financial institutions engaged in securities lending transactions. Its standardized framework and customizable terms provide a balance between risk reduction and flexibility, making it an ideal agreement for institutions around the world. As such, it is likely to remain a key industry document for years to come.