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Article 16
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A securities borrowing and lending agreement shall at least contain the following:
- Borrowing/lending period.
- Handling fee rate, and lending fee rate expressed as percentage.
- Purpose for borrowing the securities.
- Methods of custody and redelivery of securities, and conditions for early redelivery.
- Collateral type, substitution, ratio, and maintenance ratio.
- In the event the market value of the collateral exceeds the required ratio, the mode for returning the excess amount or offsetting it against other collateral requirements.
- Calculation and payment of interest on cash collateral.
- Compensation of entitlements.
- Actions upon event of default.
- Handling of customer information.
- Cause for termination.
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