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Market Value

The definition of “Market Value” is used for the purposes of calculating the value of securities under the GMRA.  As such, it plays a key role in the margin maintenance, transaction repricing, transaction adjustment and substitution provisions.  As a concept, it also lies at the heart of key definitions such as the “Margin Ratio”, “Net […]

Margin Transfer

Essentially, where on any given day a party has “Net Exposure” to its counterparty, the counterparty is required under the terms of the Global Master Repurchase Agreement to make a “Margin Transfer” to the party with the “Net Exposure” in order to extinguish that exposure. Looked at from a less formal point of view, if […]

Margin Ratio

The definition of “Margin Ratio” is the same between the 2011 GMRA, the 2000 GMRA and the 1995 GMRA.  It is important to remember that the concept of the “Margin Ratio” is only relevant for “Method A” when calculating “Transaction Exposure”. At a high level, the “Margin Ratio” is an expression of how much excess […]

Income Payment Date

Broadly, an “Income Payment Date” is the date when a party to a Repurchase Transaction can be certain that “Income” in relation to a security held pursuant to that Repurchase Transaction is being paid to the party in question. The exact “Income Payment Date” depends on whether the underlying securities are bearer securities or registered […]

GMRA: A-Z Equivalent Securities

The definition of “Equivalent Securities” refers to securities which are equivalent to the “Purchased Securities”.  In other words, they are securities which are equivalent to the original securities which the Buyer bought from the Seller (or, if it’s easier to look at a Repurchase Transaction as being economically equivalent to a loan, “Equivalent Securities” are […]


Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets of the same type.  The concept of ‘fungibility’ lies at the heart of what it is for one asset to be “equivalent to” another asset. By way of an example, one five pound note is entirely fungible […]

Forward Transaction

In the context of a GMRA, a “Forward Transaction” is a Transaction in respect of which the Purchase Date is at least three Business Days (“three” is actually in square brackets, so that parties can select the number of Business Days that should apply) after the date on which the Transaction was entered into and […]

Event of Default

There are ten “Events of Default” under the 2000 and 2011 GMRAs, but only 8 under the 1995 GMRA.  The occurrence of an “Event of Default” allows the non-defaulting party to terminate the GMRA as well as all outstanding transactions.  At a high level, the Events of Default address circumstances where: Where the text is […]

Equivalent Margin Securities

The concept of “Equivalent Margin Securities” must not be confused with the concept of “Equivalent Securities”, although both rest on the concept of “equivalence” (otherwise known as ‘fungibility’ – the ability of a good or asset to be interchanged with other individual goods or assets of the same type). The definition of “Equivalent Securities” refers […]

Default Notice

The main difference between, on the one hand the 1995 and 2000 GMRAs and, on the other hand, the 2011 GMRA insofar as they relate to “Events of Default” lies in the way in which the concept of the “Default Notice” is used. Under the 1995 and 2000 GMRAs, the delivery of a “Default Notice” […]

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