COLL 7.6.2 Stock Lending Requirements—QFC Retail Schemes

(1) A stock lending arrangement may be entered into by or for a QFC retail scheme only if all the following requirements are met:
(a) all the terms of the agreement under which securities are to be reacquired by the independent entity for the scheme are in a form that is acceptable to the independent entity and are in accordance with good market practice;
(b) the counterparty is—
(i) an authorised firm; or
(ii) a person authorised (however described) under the law of the State or a zone 1 country to deal in investments as principal in relation to OTC derivatives and the person is principally regulated by a regulatory or governmental entity in that jurisdiction;

Note Authorised firm and OTC derivative are defined in the glossary. Zone 1 country is defined in INAP.
(c) collateral is obtained to secure the obligation of the counterparty under the terms mentioned in paragraph (a) and the collateral is—
(i) acceptable to the independent entity; and
(ii) adequate under rule 7.6.3 (1) (Treatment of collateral for stock lending—QFC retail schemes); and
(iii) sufficiently immediate under rule 7.6.3 (2).

Note Collateral is defined in the glossary.
(2) For subrule (1), the counterparty is the person who is obliged under the agreement mentioned in subrule (1) (a) to transfer to the independent entity—
(a) the securities transferred by the independent entity under the stock lending arrangement; or
(b) securities of the same type and amount.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)