The Bank assumes no liability or liability for (i) a breach of obligation by a borrower in the context of or in connection with a loan and/or debt contract or other agreement relating to that loan or any other means relating to a loan: (ii) credit or guarantee securities held in a guarantee account with a third party, with the exception of providing services under this rider and complying with instructions received under the deposit agreement to provide or receive these securities or guarantees, or (iii) losses incurred by a person as a result of a non-sale resulting from a failure to recall securities through timely loans. create a title account (the “title account”) and a collateral account (the “collateral account”) in connection with the above. c. The agent may use one or more omnibus title accounts opened on his own books on behalf of their clients (the “administrative accounts”), for the temporary receipt and delivery of borrowed securities. Assets and securities included in the management account become securities borrowed when the loans are sold out. The agent will immediately credit this delivery of securities borrowed from the lender`s account. By choosing Citibank as a licensed borrower, you agree that Citibank may, from time to time (1) lend securities for its own own transactions, or (2) lend securities to you and lend them to other borrowers as risk-free investors/line lenders. With regard to only these loans, the agent has all the rights and obligations of the borrower in accordance with the loan agreements, provided, however: if securities are registered on the agent`s own account, the assets must not be separated from the agent`s securities and, in the event of the agent`s default, the assets cannot be protected as well against the claims that are claimed on behalf of the agent`s general creditor. The borrower is contractually obliged to return to the lender securities corresponding to the securities borrowed, but the lender is subject to the borrower`s credit risk. In the event that the borrower does not re-deliver the borrowed securities (and the collateral is not sufficient to cover the borrower`s obligations to the lender), the agent is not responsible for a reduction in the value of the borrowed securities resulting from the borrower`s default, unless otherwise provided for in section 4 (b) of the Agency contract. Typical securities lending requires countervailing brokers that facilitate the transaction between lenders and lenders.
The borrower pays a royalty to the lender for the shares and this fee is divided between the lender and the clearing house. The agent does not serve as the custodian of the lender`s securities, but as part of the exercise of its activity under this agreement, the agent has certain custodian obligations with respect to the retention of securities and security, the settlement of loans and the service of assets.