How does your firm vary its mismatch between the maturities of loans and investments? Provide on a monthly basis for the three (3) year period ended 12/31/14 by asset class: Average daily balance of outstanding loans Average market value of total lendable securities Average percentage of loans outstanding to lendable securities Total income earned, after payment of rebates, but prior to split with clients Average gross spread provided to your clients Average duration mismatch between securities loans and the cash collateral pool. Approved Borrowers Borrower selection and review. Describe your process for approving borrowers and establishing credit limits. How and how often is credit worthiness reviewed? Describe the process and personnel devoted to this effort. Do you have special procedures when market volatility is high? How are maximum loan amounts set and monitored? How is a to any one borrower limited or monitored? particular client’s exposure Can the client establish a limit for loans to a give borrower? Which area of your firm is responsible for credit analysis and how does it interact with the securities lending division? How will your firm address the provisions of Title 62 § 90 (Appendix which G) require OST to pre-approve borrowers? With how many borrowers do you conduct business? How many are currently active? Please provide a list and identify those you consider your primary borrowers. Describe the process of determining the rebate rate to the borrower. Is this fixed for the life of the loan? Have you ever experienced a borrower default? If yes, provide details, such as your dollar exposure and how clients were impacted. If no, please provide examples, if firm’s applicable, of instances where your procedures helped avoid a borrower default or led you to cease doing business with a particular counter-party. Does your firm have compensation arrangements with borrowers beyond the normal form of negotiating rebates/fees that OST should know about? Has the firm ever dismissed or penalized a borrower within its program? Please describe. Indemnification At a minimum, the Securities Lending firm must indemnify OST for borrower default.
How does your firm vary its mismatch between the maturities of loans and investments? Provide on a monthly basis for the three (3) year period ended 12/31/14 by asset class: Average daily balance of outstanding loans Average market value of total lendable securities Average percentage of loans outstanding to lendable securities Total income earned, after payment of rebates, but prior to split with clients Average gross spread provided to your clients Average duration mismatch between securities loans and the cash collateral pool. Approved Borrowers Borrower selection and review. Describe your process for approving borrowers and establishing credit limits. How and how often is credit worthiness reviewed? Describe the process and personnel devoted to this effort. Do you have special procedures when market volatility is high? How are maximum loan amounts set and monitored? How is a particular client’s exposure to any one borrower limited or monitored? Can the client establish a limit for loans to a give borrower? Which area of your firm is responsible for credit analysis and how does it interact with the securities lending division? How will your firm address the provisions of Title 62 § 90 (Appendix G) which require OST to pre-approve borrowers? With how many borrowers do you conduct business? How many are currently active? Please provide a list and identify those you consider your primary borrowers. Describe the process of determining the rebate rate to the borrower. Is this fixed for the life of the loan? Have you ever experienced a borrower default? If yes, provide details, such as your firm’s dollar exposure and how clients were impacted. If no, please provide examples, if applicable, of instances where your procedures helped avoid a borrower default or led you to cease doing business with a particular counter-party. Does your firm have compensation arrangements with borrowers beyond the normal form of negotiating rebates/fees that OST should know about? Has the firm ever dismissed or penalized a borrower within its program? Please describe. Indemnification At a minimum, the Securities Lending firm must indemnify OST for borrower default.