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Mercado al día / Negociación

 

 

Standard agreements

 

The stock lending counterparties are the Peruvian Securities Intermediary Agents (“Owner’s SIA” and “Borrower’s SIA) only, who can trade with their own portfolio or on behalf of a third party (“Peru Lender” and “Peru Borrower”). There is no need of an agreement between SIAs since the model is completely regulated by the Applicable Peruvian Law, assuring the enforceability of the trading conditions.

 

If the SIA acts on behalf of a local third party, the SIA can continue using its own private agreement, as it is the current practice. In case of a foreign third party, BVL suggests to subscribe the GMSLA and the Peruvian appendix, in its version for Peru Borrower or Peru Lender, as the case may be.

 

   a) The GMSLA is the Global Master Securities Lending Agreement, which is a standard master agreement for securities lending transactions in the cross-border market. This document is provided by the International Securities Lending Association (ISLA) and is originally to be subscribed between a lender party and a borrower party and describes general characteristics of the model throughout 27 clauses, covering the process from beginning to end. Note that not all the clauses will be applicable to the Peruvian market, e.g. netting provisions, aggregated valuations and others.

 

   For the purposes of the Peruvian market, where there is no need of an Agreement between the counterparties Owner’s SIA and Borrower’s SIA, the GMSLA would have to be subscribed between the SIA and the investor (Peru Lender or Peru Borrower, as the case may be).

 

  The GMSLA is available in: https://www.ird.gov.hk/eng/pdf/appsbla/gmsla2000.pdf

 

  b) The Peruvian appendix, to be signed between the SIA and the investor (Peru Lender or Peru Borrower, as the case may be), makes reference to specific Peruvian features and ensures the applicability of the Agreement without inconsistencies.

 

  The purpose of the appendix, in addition to specifying unique features of the Peruvian model, is to ensure the correct alignment of the SIA in relation to the investor:

 

  -The commitment between the Borrower’s SIA and the Peru Borrower will protect the collateral delivered by the latter since the counterparty responsible for the compliance will be the Borrower’s SIA.

 

  It is important to note that in the event of any inconsistency between the terms of the GMSLA and the Peruvian Appendix with respect to a Peruvian Loan, the Peruvian Appendix will prevail for the purpose of such Peruvian Loan. Also, in the event of any inconsistency between the Peruvian Appendix and the terms of the Applicable Peruvian Law, the Applicable Peruvian Law shall prevail.

 

  BVL makes the Peruvian Appendix available to the market, to be subscribed between a foreign investor and the SIA of its preference. It should be noted that BVL assumes no responsibility for the content, subscription and compliance of the obligations of the Peruvian Appendix.

 

  To download the Peruvian Appendix borrower click here

 

Lima Stock Exchange publishes on its website the Peruvian Appendix to GMSLA (May 2000 version) making it available to the “Peru borrower” and the “Borrower securities intermediary agent” for the consideration of a contractual reference mark in the operations of securities lending under the responsibility of the signing parties. In general terms, the Peruvian Appendix will create a contractual relationship between the Peruvian Borrower and the Borrower Securities Intermediary Agent that will be governed by and construed in accordance with English law. It should be noted that Lima Stock Exchange assumes no responsibility for the content, subscription and compliance of the legion of the Peruvian Appendix, and we assume no obligation to review or supplement this Appendix should such laws or regulations be changed by legislative or regulatory action, judicial decision or otherwise. Any difficulty that may arise between the parties with respect to compliance, request, validity, nullity, termination or other matter related to the Peruvian Annex, it will be the responsibility of the parties involved and not the Lima Stock Exchange to solve it.