The International Capital Market Association (ICMA), the leading trade association for the international capital market, has today published the 2013 legal opinions which support the Global Master Repurchase Agreement (GMRA), the standard agreement used for international repo transactions. The 2013 opinions support the use of the GMRA in 63 jurisdictions worldwide, with the notable addition of an opinion for Russia and an expansion of counterparty coverage in a number of key jurisdictions.
The GMRA is the most widely used standard agreement for international repo transactions and is the basis for repo agreements in many national markets. The legal opinions provide, amongst other things, analysis of the netting provisions of the GMRA in the case of the insolvency of a counterparty to the agreement. The netting provisions of the GMRA seek to reduce claims and obligations under the agreement to a single net sum, providing significant protection to both parties.
GMRA legal opinions are obtained each year from independent law firms in different countries. This considerable body of legal work is made available to ICMA members as a part of their membership of the association. While all 2013 opinions cover, as a minimum, companies, banks and securities dealers, the opinions for 37 jurisdictions additionally cover insurance companies, hedge funds and mutual funds as parties to the GMRA.
The GMRA 2011 and the legal opinions can be downloaded free of charge by ICMA members from the ICMA website. A list of the countries covered by the legal opinions can be found at:http://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/short-term-markets/Repo-Markets/GMRA-Legal-opinions
International Capital Market Association (ICMA)
ICMA represents financial institutions active in the international capital market worldwide, with members in 50 countries. ICMA’s market conventions and standards have been the pillars of the international debt market for over 40 years, providing the framework of rules governing market practice which facilitate the orderly functioning of the market. ICMA actively promotes the efficiency and cost effectiveness of the capital markets by bringing together market participants including regulatory authorities and governments. See: www.icmagroup.org