In essence, “Margin Securities” are just securities which are reasonably satisfactory to a party making a call for a “Margin Transfer” under a Global Master Repurchase Agreement.  In simple terms, they are securities which one party to a Repurchase Agreement transfers to its counterparty in order to extinguish either “Transaction Exposure” or “Net Exposure”.

Under the Global Master Repurchase Agreement, the “Margin Percentage” is simply defined as “with respect to any Margin Securities or Equivalent Margin Securities, the percentage, if any, agreed by the parties acting in a commercially reasonable manner”. Under the GMRA, the “Margin Percentage” is applied to the “Market Value” of Margin Securities or Equivalent Margin […]

A “lien” is a legal claim or legal right against assets.  Liens are typically asserted against assets that are pledged as collateral in relation to a loan or other debt.  The holder of the lien has the right to retain the assets in question for so long as the debt remains outstanding. The concepts of […]

“ICMA” stands for the “International Capital Market Association” – the industry body responsible for drafting the Global Master Repurchase Agreement.

A “haircut” is a reduction which is applied to the value of an asset.  Typically, “haircuts” are expressed as a percentage.  For example, if a “haircut” of 5% were applied to bonds worth GBP 100, it would mean that the bonds would be treated as if they were only worth GBP 95 for the purposes […]

The “GMRA” (pronounced “JIMRA”) is short-hand for the “Global Master Repurchase Agreement”.  This is the primary industry standard document under which transactions called “Repurchase Transactions” (or “Repos” for short) and “Buy/Sell Backs” are transacted. There are actually four versions of the GMRA.  The first was published in 1992, followed by a second version in 1995.  […]

The “Global Master Repurchase Agreement” (or “GMRA” for short) is the industry standard contract for transacting Repurchase Transactions.  It is published by the International Capital Market Association (ICMA).  There have been four versions of the Global Master Repurchase Agreement – the first published in 1992.  The GMRA was subsequently updated in 1995 in order to […]

The concept of a “Forward Repricing Date” relates to “Forward Transactions” entered into under a GMRA. The “Forward Repricing Date” with respect to any Forward Transaction is the date which is such number of Business Days before the Purchase Date as is equal to the minimum period for the delivery of margin applicable under paragraph […]

The definition of “Electronic Messaging System” (which is found in paragraph 2(s) of the 2011 Global Master Repurchase Agreement) refers to “an electronic system for communication capable of reproducing communication in hard copy form”.  Perhaps the most interesting aspect of the definition is that it expressly INCLUDES communications sent via email.  Any communication required to […]