Common use of Collateral for Loaned Securities Clause in Contracts

Collateral for Loaned Securities. Pursuant to the Agreement, in exchange for the Loaned Securities, SP will pledge to you in an account either cash collateral or U.S. Treasuries, as permitted under Rule 15c3‐3(b)(3)(iii)(B) of the Securities Exchange Act of 1934 and related SEC guidance. There may be market fluctuation in the value of the U.S. Treasuries posted to you as collateral under the Agreement, which may result in the value of the U.S. Treasuries being insufficient to replace the full value of the Loaned Securities, should SP default. If SP, defaults and the market value of the Loaned Securities increases on the day that SP defaults, the cash collateral provided by SP may be insufficient to fully collateralize the Loaned Securities.