The “Repurchase Date” is the date upon which the Buyer is required to sell “Equivalent Securities” back to the Seller with respect to any Repurchase Transaction executed under a GMRA.  More specifically, on the “Repurchase Date”: Failure to do either of the above constitutes an Event of Default for the purposes of the GMRA. It […]

In practice, “repricing” a transaction (whether that transaction is a Repurchase Transaction or a Buy/Sell Back Transaction) is an alternative to making a traditional margin call for a party with either “Transaction Exposure” (with respect to a single transaction) or “Net Exposure” (with respect to multiple transactions).  In practice, this method tends to be used […]

In simple terms, a “Replacement Transaction” is the transaction which exists AFTER it has been ‘adjusted’ pursuant to Paragraph 4(l) of the Global Master Repurchase Agreement. In practice, “adjustment” of a transaction (whether that transaction is a Repurchase Transaction or a Buy/Sell Back Transaction) is an alternative to making a traditional margin call for a […]

The term “Repo” is short for “Repurchase Transaction”. In a Repurchase Transaction, one party (called the “Seller”) sells an asset to another party (called the “Buyer”) for a price agreed between the two.  The asset being sold is usually a bond, although it can also be a share.  At the same time as the sale […]

Summary The Financial Conduct Authority has announced a series of fines for Banque Havilland SA and three of its employees for breaching principles of integrity in a recent Decision Notice. In 2017, Qatar was engaged in a diplomatic and economic dispute with other Gulf States, primarily Saudi Arabia and the United Arab Emirates. Banque Havilland drew […]

“New Purchased Securities” are really just securities which have been substituted for the original “Purchased Securities” under Paragraph 8 (“Substitution”) of the GMRA. In other words, if you were to regard a Repurchase Transaction as economically equivalent to a loan, “New Purchased Securities” are really nothing more than substitute collateral provided in relation to the […]

The Law Debenture Trust Corporation plc v Ukraine [2023] UKSC 11 Summary This contract law case is steeped in international geopolitics, with direct ties to the 2014 revolution that overturned the government of Viktor Yanukovych, and to the current Russian invasion of Ukraine. Law Debenture Trust applied for summary judgment. The UK Supreme Court rejected […]

ISDA is in the process of responding to a request for comments on the SEC’s proposed “Safeguarding Rule for Investment Advisers (the “Safeguarding Rule”). The regulator seeks to amend the 60 years old Rule 206(4)-2 of the Advisers Act 1940, redesignating it as a new rule 223-1 under the same Act (the “Custody Rule”). Aimed […]

The Global Master Repurchase Agreement is a framework document which allows counterparties to enter into multiple underlying Repurchase Transactions.  In relation to some of those Repurchase Transactions, a ‘first party’ may be purchasing securities from its counterparty whereas under other Repurchase Transactions, the counterparty may be purchasing securities from the ‘first party’.  As such, it […]