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The Stock Borrowing And Lending Agreement serves as the primary contractual framework for securities lending transactions in Malaysia. It is essential for financial institutions engaging in securities lending activities, whether as lenders or borrowers, and must comply with the Capital Markets and Services Act 2007 and Securities Commission guidelines. The agreement covers crucial aspects including loan initiation, collateral management, corporate actions, default scenarios, and regulatory requirements specific to the Malaysian market. It can be used by both conventional and Islamic financial institutions, with provisions adaptable to Shariah compliance requirements where necessary. The document is particularly important for market making, settlement coverage, and enhanced portfolio returns in Malaysia's growing capital markets.

1. Parties: Identification of the lender and borrower, including their regulatory status and capacity

2. Background: Context of the agreement and brief description of the securities lending arrangement

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including market-specific Malaysian terms

4. Loans of Securities: Core provisions governing the borrowing and lending of securities, including loan procedures and confirmations

5. Delivery and Redelivery: Procedures for delivering securities and returning them at the end of the loan period

6. Collateral Requirements: Details of acceptable collateral, maintenance margins, and marking to market procedures

7. Income and Corporate Actions: Treatment of dividends, rights issues, and other corporate actions affecting borrowed securities

8. Rates and Fees: Lending fees, rebate rates, and other charges applicable to the borrowing arrangement

9. Tax: Treatment of withholding tax, stamp duty, and other applicable Malaysian tax considerations

10. Events of Default: Circumstances constituting default and consequences thereof

11. Set-off and Close-out: Rights and procedures for set-off and closing out positions following default

12. Representations and Warranties: Standard and transaction-specific representations by both parties

13. Covenants: Ongoing obligations of the parties throughout the lending relationship

14. Indemnities: Scope of indemnification obligations between parties

15. Termination: Provisions for terminating the agreement or individual loans

16. Governing Law and Jurisdiction: Malaysian law as governing law and jurisdiction provisions