Securities lending arrangements arise when a longer term holder of securities agrees to provide them to a borrower for a period. The borrower is contractually obliged to return, at the end of the period, replacement securities which are equivalent in number and type to the original securities. Consequently, at the end of the period, after the return of the replacement securities, the lender retains exactly the same portfolio as before.
In Australia, securities lending transactions generally are documented using the 2003 version of the Australian Master Securities Lending Agreement, published by the Australian Securities Lending Association Limited. Further details on this agreement can be found in 2.3 "ASLA".
The other less commonly used documentation is the Overseas Securities Lending Agreement published by the International Securities Lending Association. Details can be found at www.isla.co.uk.
Last Update Date 29 Jun 2011