When an organisation in one part of the world is attempting to unlock funds for any of a broad range of reasons, it may ultimately seek a loan agreement with a lender in another jurisdiction. 

However, various types of loan agreements exist between borrowers and lenders. So, if your organisation is contemplating its options right now, you will need to be well-informed on the distinctions between these types of agreement in purpose, structure, and usage. 

Alongside this, for a particular loan agreement to which you commit, there may – or may not – be a need to put in place a UK-based process agent

In this article, then, we will explore two common forms of loan agreement for which such a process agent may be necessary – term loan facility agreements and revolving credit facility agreements. 

How do these types of loan agreement differ? 

Here is a concise summary of what these types of loan agreements are, and the ways in which they vary from each other: 

• A term loan facility agreement is a contract where a lender provides the borrower with a fixed amount of money (a “lump sum”). This lump sum is then repaid over a specific period – “the term” – through scheduled payments (the principal and interest). 
• A revolving credit facility agreement is a contract where the lender gives the borrower a maximum credit limit. The borrower is able to draw upon, repay, and reborrow multiple times during the term of the facility – similar to a credit card. 

How might your chosen type of loan agreement affect your use of it?  

If, then, your organisation commits to a term loan facility agreement, you will typically be expected to make repayments in accordance with a fixed schedule (such as monthly or quarterly). These payments may include principal plus interest, or interest-only with a “balloon” payment at the conclusion of the term. 

You are likely to consider this kind of loan agreement as an answer to specific, one-time financing needs, such as capital expenditures, acquisitions, or project financing. 

In the event, however, of your organisation deciding in favour of a revolving credit facility agreement, there won’t typically be a fixed repayment schedule for the principal. You will, however, need to pay interest on drawn amounts, and the facility will have a maturity date – at which point, all outstanding amounts will be due. 

The latter type of agreement, then, could be a suitably flexible solution for fluctuating cashflow needs, whether you require a short-term liquidity injection or help with ongoing operational expenses. 

When would a UK process agent be needed for loan agreements like these? 

Whichever type of loan agreement you opt for between those outlined above, it is not the specific type of facility that will dictate whether your organisation is required to appoint a UK-based process agent. 

Instead, the key factors will be: 

• The governing law of the agreement. If, for instance, a given agreement is governed by English law and as a borrower you do not have any physical presence or registered office in the UK (such as if you are a United States-based or Asian company), it will typically be a contractual necessity for you to appoint a UK-based process agent. 
• The borrower’s location. The services of UK process agents would be particularly relevant in situations where the lender is in the UK, but the prospective borrower is situated in another jurisdiction. If this is the case for your company seeking to take out a loan, you can expect to be asked to put in place a UK process agent. 

Having a UK process agent in place would mean that in the event of a dispute occurring later between the two parties – for example, as a result of the borrower defaulting on the loan – the lender would be able to serve formal notices to the borrower’s UK-based process agent. This would constitute proper service in accordance with English court procedure rules. 

To emphasise: as a borrower, in a situation like the above, it would not be a question of you being able to “choose” whether to appoint a UK process agent or not. It would be a contractual requirement, so if you refused to comply with this requirement, you would not be able to enter into the loan agreement at all. 

For more information about our own process agents in the UK here at London Registrars, please download our brochure for this service. You are also welcome to contact us directly with any further questions you may have. 

Within financial markets, a contractual arrangement known as a Liquidity Services and Custody Agreement may sometimes be used. This type of contract sets out arrangements for the management and safeguarding of financial assets, frequently involving a custodian institution and a client. 

Such an agreement outlines the specifics of how the custodian institution will hold assets, handle transactions, and potentially provide liquidity support for the client. This, in turn, will help ensure the efficient management of investments and the timely flow of funds. 

What are the key components of this type of agreement? 

The overriding purpose of a Liquidity Services and Custody Agreement is to protect and manage the client’s assets, making sure they are handled in accordance with agreed-upon terms and applicable regulations. 

Various aspects of asset management are typically covered by this kind of agreement, encompassing safekeeping, the settlement of transactions, and the potential liquidation of assets. 

Here is a breakdown of the main components of such a contract: 

• Custody services 

This part of the agreement relates to the safekeeping and administration of financial assets – such as securities or cash – by the custodian such as a bank, on behalf of the client. 

The custodian will typically be required to hold the assets securely, manage settlements, and potentially provide additional services such as recordkeeping, reporting, and/or handling corporate actions, such as interest payments or dividends. 

• Liquidity services 

Under this section of the contract, the bank or financial institution will typically provide cash management and liquidity provision services for the client. 

The goal of such liquidity services is to ensure the timely availability of funds. This may be achieved through the provision of a liquidity facility or other mechanisms to support investment operations. 

• Agreement details 

It can be expected that any given Liquidity Services and Custody Agreement will specify the parties involved. Alongside this, information is typically given on the scope of services, fee arrangements, termination procedures, and liability clauses. 

A Liquidity Services and Custody Agreement combines the aforementioned functions under a single framework, with one or multiple parties providing liquidity and custodial services, covering both market-making and the safekeeping of assets. 

Is a UK process agent service normally needed for this type of agreement? 

The fact that Liquidity Services and Custody Agreements are common in cross-border financial transactions, might raise the question for you of whether a UK-based process agent will need to be appointed as part of such an arrangement. 

After all, a process agent is an appointed representative in a particular jurisdiction (such as the UK) who receives legal documents, notices, or court proceedings on behalf of a party that lacks a physical presence in the given jurisdiction. 

So, to answer that question: yes, if a particular Liquidity Services and Custody Agreement involves parties from multiple jurisdictions (such as a US-based client, a liquidity provider in Dubai, and a UK-based custodian), and the agreement is governed by English law, a UK-based process agent may well be required. This would help ensure compliance with English law and a more streamlined legal process, in the event of a dispute between the parties occurring later. 

Ultimately, if a party to such an agreement does require a UK process agent to be appointed as part of the contract, the counterparty won’t have a choice in this matter; they will need to agree to a process agent being appointed if they wish to enter into the agreement. 

For further information about our UK process agent service, contact us today 

Do you have any further questions about how making London Registrars your chosen UK-based process agent service provider would work for a given transaction? If so, please feel free to download our brochure for more details, or to get in touch with us directly with your query. 

The responsibilities of companies in the water and canalisation sectors are undoubtedly very serious ones. The duties of these organisations, after all, tend to revolve around ensuring a safe and reliable water supply for the general public, as well as the treatment and disposal of wastewater in ways that protects the environment. 

Your organisation in these sectors may be engaged in such activities as the collection, treatment, and distribution of water, as well as the processing of wastewater and the management of infrastructure like reservoirs, treatment plants, and pumping stations. 

It might not, however, be immediately obvious as to what circumstances might require your organisation in the water or canalisation industry to appoint a process agent in the UK. 

Introducing the concept of a process agent, and why you might be expected to appoint one 

You may be reading this because you are looking to enter into a transaction with another party in a different part of the world to your own. 

In the event of this circumstance coming to pass, you may be told that you must appoint an “agent for service of process” (another term for a “process agent”) as part of the contractual terms. 

You might be asked to do this if, for example, the other party is based in the UK, and the transaction is to be governed by English law, but your company lacks its own address in England. 

Typically, the counterparty in such a contract may demand that a UK process agent is appointed, so that your organisation has an address in England able to accept service of notices, proceedings, or documents on your behalf. 

So, your appointment of a UK-based agent for service of process to represent your organisation in England, would act as a source of reassurance and protection for the UK-based counterparty, in the (hopefully unlikely) event that a dispute occurs later. 

It would mean legal proceedings against you could be commenced relatively quickly and smoothly, without the need for the counterparty to attempt to serve papers at your address in your “home” jurisdiction. 

What are some of the situations, then, that may necessitate you putting a UK-based process agent in place? 

Ultimately, whether your company in the water or canalisation industry “needs” to appoint an agent for service of process in the UK, will depend on such factors as your organisational structure, jurisdictional requirements, and specific obligations according to a contract or the law. 

However, some examples of circumstances in which it may become necessary or advantageous, include: 

• When you are entering into a contract with a foreign entity 

This is the scenario we more-or-less explained above. Indeed, even if neither party to an agreement is in the UK, the contract may still be governed by English law. 

In that situation, your appointment of a UK-based process agent may help ensure any legal matters or disputes that occur at a later stage are more efficiently and simply dealt with, than would have otherwise been the case. 

• For the purposes of regulatory compliance 

As a water company, it may be necessary for you to pay heed to notices or documents from regulatory bodies such as Ofwat, which is the water regulator for England and Wales. 

When you have a process agent in place in the UK, they can receive and manage these communications on your organisation’s behalf. 

• When public inquiries are undertaken with implications for your organisation 

Given their obligations to the public, it is entirely appropriate for companies in the water and canalisation industries to be subject to a high level of scrutiny from external bodies.  

In the event, then, of public inquiries or investigations taking place in relation to the water industry, your process agent in the UK could receive relevant documentation on your behalf. This can help ensure any vital communications are not missed or overlooked by your company. 

Enquire to London Registrars to learn more about our process agent service 

To find out more about how London Registrars can potentially operate as your own organisation’s professional, compliant, and cost-effective agent for service of process in the UK, please reach out to our team today. 

You are also welcome to download and peruse our latest process agency brochure for further details of our terms, conditions, and charges. 

The simple way to define a Used Aircraft Sale and Purchase Agreement – sometimes referred to by the initialism SPA, or APA – is as a legally binding contract between a seller and a buyer, setting out the terms of sale for a used aircraft. 

In such a scenario, the “seller” will typically be the owner of the aircraft, while the buyer will tend to be an airline or leasing company. 

The vital things to know about Used Aircraft Sale and Purchase Agreements

APAs play an imperative role in the process of pre-owned aircraft changing hands. These contracts help provide clarity, protect the participants in this type of transaction, and allow for a smooth transfer of ownership. 

A transaction involving the sale of an aircraft is not, of course, just “any other” transaction; there are high financial stakes involved, as well as regulatory obligations and technical complexities. 

Unsurprisingly, then, an APA will typically go into great detail about each and every key aspect of the sale. The components of such a document can encompass, but are not usually limited to: 

• Identification of the parties, including the accurate legal names of the buyer and seller. 
• A description of the aircraft, specifically the manufacturer, model, year, serial number, registration number, and accompanying items like logbooks and manuals. 
• The purchase price and payment arrangements. The agreed price will, of course, be stated, along with the deposit amount, whether the deposit is refundable, and the payment method. 
• Details on the pre-purchase inspection process. This will set out how the aircraft will be examined to verify its condition. The information typically provided here will include who carries out the inspection, as well as the conditions under which the would-be purchaser can reject the aircraft. 
• Delivery terms, including such aspects as when, where, and how delivery of the aircraft will take place, and when title will transfer to the buyer. 

Will, then, a process agent in the UK be required for your own APA? 

To provide a quick summary of what a process agent is, they are a representative appointed to receive formal notifications, such as legal documents or court summons, on behalf of a party involved in an agreement. 

You can learn more about the role of a process agent in the UK context, by visiting the relevant page of our website for this service at London Registrars. 

It might be the case that you are looking to enter an APA for the transfer of an aircraft, but you have been told that you must agree to a UK process agent being appointed. 

Ultimately, though, whether a process agent is needed for a particular contract will likely depend on certain specifics: 

• You may be required to appoint a UK process agent if you and the other party are located in different countries and the contract between you is based on UK jurisdiction. Another example would be if you are in the United States, and the other party is in the UK. In these situations, the ‘contract giver’ may insist on the appointment of a UK process agent who can accept service of notices, proceedings, or documents on your behalf in order to avoid expensive delays in the UK courts.
• You may not be required to appoint a UK process agent if both you and the other party are based in the same jurisdiction – such as the UK – and the APA is governed by local law (for example, English law). In this situation, both parties can likely be served directly, should one party wish to take legal action against the other. Nor is a process agent likely to be required if the transaction involves the straightforward sale of a relatively small aircraft (again, presuming the two parties are in the same jurisdiction). 

If you are in any doubt about the exact requirements applicable to you, or if you would like to know more about our own services and expertise as a process agent at London Registrars, please don’t hesitate to reach out to us. You are also welcome to download our process agent brochure.

Governed by English law and designed for non-US central counterparties (CCPs), the 2017 ISDA/FIA Cleared Derivatives Execution Agreement – or “CDEA” – is a template that participants in the cleared swaps markets can use to negotiate execution-related agreements for swaps intended to be cleared. 

The bodies behind the CDEA are the Futures Industry Association (FIA) and the International Swaps and Derivatives Association, Inc. 

The document was developed with the help of a committee consisting of representatives from buy-side as well as sell-side firms with expertise in both futures and OTC derivatives. 

Is a process agent service essential for agreements based on the CDEA? 

A question that is commonly asked about the CDEA is whether transactions based on this framework need to involve a UK-based process agent being appointed. 

The short answer to this question is that there is no blanket requirement for all parties using the CDEA template to ensure a process agent service is used when they come to an agreement. 

However, the approach that is ultimately taken will depend on the specific circumstances – not least the jurisdictions of the parties to a given transaction. 

Process agents in the UK play a crucial role in all manner of contractual arrangements 

Before we proceed further in relation to the CDEA in particular, it is worth reminding ourselves exactly what a process agent is. 

A process agent – also sometimes referred to as a “registered agent” or an “agent for service of process” – is a representative appointed to receive legal documents, such as court papers or notices, on a company or individual’s behalf. 

It tends to become particularly important for a process agent to be appointed, in situations where the prospective parties to an agreement are not based in the same jurisdiction. 

If, for instance, one party to a transaction is situated in the UK and the other party is based outside of the UK, if the non-UK party has agreed to appoint a UK-based process agent at the outset of the contract, this will make it easier for the UK-based party to take legal action later, in the (hopefully unlikely) event of this being required at some stage. 

So, in what circumstances does the appointment of a UK process agent become necessary under the CDEA? 

A relatively “obvious” example of a situation in which a UK process agent service would not be required for an agreement based on the CDEA, would be if both parties have a registered office in the UK. In such a scenario, a given party’s UK address can be used for service of process. 

Alternatively, it may be the case that one or both parties to a CDEA transaction are based outside of the UK. If so, and bearing in mind that the contract is based on English jurisdiction, the appointment of a UK process agent will be a standard requirement. In addition, the agreement itself may incorporate a clause stipulating the appointment of a UK-based process agent to allow for the efficient serving of legal documents at the process agent’s address.

Remember: under English court procedure rules, service at the address of the counterparty’s UK-based process agent would constitute proper service. 

It is important to reiterate that where a process agent needs to be appointed, this is not a requirement imposed by the CDEA template itself. Ultimately, it will be the need to adhere to the relevant court procedural rules under the applicable local jurisdiction that will dictate whether a process agent service becomes necessary. 

If you are in any doubt, please don’t hesitate to contact us 

To discuss the relevance of a process agent service like ours to an agreement that you are looking to enter – perhaps because you have been told by the other party that you agreeing to the appointment of a process agent will be necessary – please don’t hesitate to contact London Registrars. 

When you do so, we will also be pleased to provide you with a quote for our comprehensive and cost-effective service as an agent for service of process.

The sheer complexity of derivative products should make it unsurprising that there is a need for a standard contract governing all over-the-counter (“OTC”) derivatives transactions. 

Sure enough, such a contract exists in the form of the 2002 ISDA Master Agreement. Published by the International Swaps and Derivatives Association, or “ISDA”, this master agreement outlines various provisions. 

These provisions encompass such aspects as the obligations of the counterparties, as well as payment and deliveries, contract termination, and dispute resolution arrangements. 

However, you might already be familiar with many of the essential elements of the 2002 ISDA Master Agreement, and the importance of this standard contract for OTC derivatives transactions. 

What you may be less familiar with, is whether you will require a process agent in the UK if you are looking to enter into an arrangement based on the 2002 ISDA Master Agreement. So, let’s take you through the key things to know in response to this frequent question. 

What is a process agent in the UK, anyway? 

The term “process agent” (also sometimes known as an “agent for service of process”, or a “registered agent”) is commonly used in reference to a designated entity or individual that a party appoints in order to receive legal documents on its behalf in a particular jurisdiction. 

This is relevant to agreements involving complicated financial products such as derivatives, because the counterparties to such transactions aren’t always in the same jurisdiction as each other. 

So, in the event of the agreement in question being governed by English law, and one party wishing to take legal action against the other, it will greatly help if the latter party already has a physical presence in the UK, in order to receive legal documents, proceedings, or notices. 

A process agent in the UK, appointed at the time of the transaction first commencing, can help make this process easier and smoother. 

The relevance of Section 13 of the 2002 ISDA Master Agreement 

It is this section of the 2002 ISDA Master Agreement that focuses on the governing law for the given transaction. 

Under this standard contract for OTC derivatives transactions, the general practice is for the counterparties to decide that either English law or New York law will apply to the agreement. 

Whichever decision is made between these two jurisdictions, it is given affect in the Schedule to the ISDA Master Agreement. 

An alternative system of law could theoretically be chosen as the governing law for an ISDA transaction; however, it is unusual for this to be the case. 

So, will you require a process agent in the UK for your own ISDA derivative transaction? 

The short answer to this question is that while a process agent might not always technically be required as part of a contract under the 2002 ISDA Master Agreement, it often is needed.  

Presuming English law has been chosen to govern the transaction, typically, a process agent in the UK will need to be appointed if one of the parties is incorporated or domiciled in the UK, but the other one is based outside the UK. 

So, if one party is based in the UK but the other one is in the European Union (EU), the latter party is normally required to appoint a process agent in the UK that can receive legal documents on their behalf. This would allow for any necessary legal proceedings to be initiated and served without cross-border complexities causing delays. 

On the other hand, a process agent may not be strictly necessary if both parties are domiciled in the same jurisdiction as the governing law for the contract (so for example, if the governing law is English, and they are both UK entities). In such a situation, it will likely be straightforward enough for any legal documents to be served directly to the relevant party. 

Whatever combination of circumstances might necessitate you appointing a process agent in the UK, we would be pleased here at London Registrars to provide tailored advice and guidance. Please feel free to call 0044 20 7608 011 today, or to download our process agency brochure for further information. 

It is difficult to talk about the international securities lending market for very long, without referencing the contract that is most frequently used in this sector – the Global Master Securities Lending Agreement, or GMSLA. 

Published and maintained by the International Securities Lending Association (ISLA), the GMSLA serves as a standard legal agreement used for the borrowing and lending of securities across various jurisdictions. 

By putting in place a standardised framework for securities lending transactions around the globe, the GMSLA helps ensure consistency across the many agreements struck in the market. 

This global relevance of the GMSLA raises the question for many potential parties to such agreements, of whether a process agent is always required for it. 

Indeed, as a UK-based process agent ourselves at London Registrars, we are often asked to cover GMSLA agreements. So, below, we have sought to provide the clarity you might need. 

The background of the GMSLA 

The Global Master Securities Lending Agreement can trace its history back to 1994, when its precursor – the original Overseas Securities Lender’s Agreement (OSLA) – was published. 

Various updates have been made to the GMSLA since then, including in 2010 and 2018. 

The 2010 version is especially commonly used, and uses title transfer to transfer collateral from borrower to lender. This differs from the 2018 update, which transfers collateral by means of a pledge. 

How is the GMSLA structured? 

Sharing many of the same provisions as the Global Master Repurchase Agreement (GMRA) that we recently wrote about here at London Registrars, the GMSLA incorporates three levels: 

• The Master agreement 
• The Schedule attachment 
• The confirmation or its automated equivalent 

The general relationship between the counterparties is set out in the Schedule, with amendments standardised in annexes. 

So, is there a need for a process agent appointment for the GMSLA? 

There isn’t a single or simple answer to this question, as the agreement itself doesn’t explicitly stipulate that a process agent needs to be appointed. 

Whether one looks at the 2010 or the 2018 versions of the GMSLA, it is silent on the topic of whether a process agent is needed. So, situation really comes down to the specifics of the particular transaction and its participants. 

Ultimately, it is up to the parties’ own discretion whether a process agent appointment is necessary for a GMSLA transaction. 

The circumstances that may call for a process agency to be put in place 

It is worth reminding ourselves when a process agent does tend to be needed for agreements like these; when the given transaction is taking place between entities that are in different legal jurisdictions. 

A process agent is an individual or organisation appointed to receive legal process on behalf of a party that might not otherwise have an address in the jurisdiction where the agreement is governed (for example, in England, if it is agreed between the parties that English law will apply to the transaction). 

So, for the purposes of facilitating legal proceedings in the event of any disputes arising between the parties or if enforcement action against one of the parties becomes necessary, having a process agent in place from the beginning may be invaluable. 

A classic example of a situation in which a UK process agent appointment becomes necessary, is if a UK firm lends securities to a US-based counterparty. In this case, the UK firm may require the US counterparty to agree that a UK-based process agent will be appointed, as a condition of the deal. 

Get in touch now to receive advice on your process agency needs 

To learn more about what a process agent appointment would look like for your organisation, and the circumstances in which it may be essential, please don’t wait any longer to contact the London Registrars team.