- Australian court holds that under a securities lending agreement based on form developed by the International Securities Lending Association, title to securities and cash exchanged in a securities “loan” is transferred.
- Accordingly, a broker-dealer who received shares under such a securities lending agreement acquired title to the shares, and became entitled to pledge the shares to its lenders; lenders, in turn, had right to foreclose on shares.
- Emphasizes the importance to hedge funds of fully understanding their complex legal and collateral relationships with prime brokers.
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