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ISLA has released a 2020 US Tax Addendum for Security Interest over Collateral to the Global Master Securities Lending Agreement (GMSLA) 2018 Agreement.
The new addendum, published Wednesday, addresses a number of issues, including the Foreign Account Tax Compliance Act (FATCA) non-compliance tax risk on collateral securities not substituted ahead of income dates. FATCA is a US federal law that targets US citizens concealing assets held in foreign accounts.
As part of its commitment to support the use of global master agreements for the securities lending industry, ISLA says it has developed a pledge collateral version of the existing GMSLA.
The new agreement is based on the existing GMSLA 2010 and provides ISLA members with an alternative to the title transfer framework, providing market participants with an additional structure to transact securities lending activity.
ISLA members have access to the master agreement, as well as the various supporting security agreements and legal opinions. ISLA members can access supporting Tri-party Control Agreements through their tri-party business representative.
The triparty agents ISLA worked with are BNY Mellon, Clearstream, Euroclear and J.P. Morgan.
