BREXIT: As of 31 January 2020, the UK is no longer an EU member state, but it has followed an implementation period during which the EU will continue to be treated as a member state for many purposes. As a third country, the UK can no longer participate in EU political institutions, agencies, offices, bodies and governance structures (except to a limited agreed extent), but the UK must continue to meet its obligations under EU law (including treaties, legislation, principles and international agreements) and submit to the ongoing jurisdiction of the European Court of Justice , in accordance with the transitional provisions of Part 4 of the withdrawal agreement. For more information, see: Brexit – Introduction to the Withdrawal Agreement. This has an impact on this exercise score. You will find practical indications: Brexit – impact on financial transactions, key issues for securitisation transactions and Brexit, impact on financial transactions, derivatives transactions and securitisations – important SIs and Brexit – have an effect on an agreement to be used when the parties can enter into transactions in which one party (an “issuer”) lends certain securities to the other party (a “borrower”) against a guarantee transfer. The guarantee agreement (version 2018) is based on the existing 2010 GMSLA. Since the early 1990s, ISLA has provided a standard legal framework for the securities lending industry. GMSLA has become a standard legal agreement in European markets, the latest version being the 2018 version of collateral inter-system security. It was a collaboration between ISLA, its members and Clifford Chance. > guarantees from the lender and borrower; > interest on unpaid debts; > termination of the contract. > Following the collapse of Lehman Brothers, a major borrower, market participants had to go through the liquidation processes in real life.
Fortunately, the majority of lenders have succeeded and have not lost, demonstrating the strength of the securities lending activity for actual beneficiaries. However, the importance of collective management has been emphasized as an essential instrument for managing counterparty risk, as well as the need for much greater transparency, particularly in the United States, where some breach of confidence in cash security reinvestment programs has been highlighted. > In the context of the crisis, regulators have begun to conduct a more in-depth review of loans and securities deposits, and a number of them have introduced restrictions on short selling around the world, which has had a negative impact on activity and uncertainty. Some restrictions are still in place at the time of the letter. Two important standard agreements govern the international lending and repo industry: the Global Master Securities Lending Agreement (GMSLA) and the Global Master Repurchase Agreement (GMRA).