Securities lending transactions
A judge in the Federal Court of Australia has considered whether
a securities lending transaction might constitute the giving of
security by the party which "lent" the securities or,
alternatively, whether the recipient of the securities might be
taken to have charged them for performance of its obligation to
transfer back to the lender equivalent securities. The case is
relevant in England, and should be regarded as persuasive
authority, because the Australian judge applied a classic analysis
of English law in finding the answers to those questions. He also
decided that the same result would have followed under the law in
the USA.
The transaction between the parties took place under a
Securities Lending and Borrowing Agreement that they had entered
into, which largely followed the form of standard documentation
that had been prepared by industry bodies, including the
International Stock Lenders Association and its
