GMSLA Security Interest Opinions

The ISLA pledge documentation is supported by two types of legal opinions: financial collateral arrangement analysis and bankruptcy remoteness.

  • Produced by Clifford Chance, this set of opinions look at the financial collateral arrangement analysis under that governing law by reference to the Security Agreement and the relevant tri-party custody documentation. The English law opinion will cover the enforceability of the Global Master Securities Lending Agreement (Security Interest over Collateral – 2018 version) under its governing law. The legal opinions do not address the parties themselves. So if a given type of party would have capacity or regulatory issue in entering into the pledge GMSLA arrangements, or if the pledge GMSLA would not be enforceable against it in its insolvency, this is not considered by the legal opinions.
  • Produced by Freshfields Bruckhaus Deringer to opine from an English, Belgian and New York law perspective, and Arendt & Medernach to opine from a Luxembourg law perspective, the bankruptcy remoteness opinions have been obtained upon the request of the ISLA Legal Steering Group (LSG). They concluded that confirmation of the bankruptcy remoteness of the posted collateral would be of benefit to all ISLA members using the pledge structure. The opinions assess the nature of the Borrower’s rights in the pledged collateral and the impact on those rights of the insolvency of the Custodian and the Lender, with the relevant jurisdictions for this analysis being (i) the jurisdiction of the governing law of the security interest, (ii) the jurisdiction of incorporation of the Custodian and (iii) the jurisdiction of the location of the securities accounts.


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