A “Tax Event” occurs if either party to a GMRA (known as the “notifying party”) notifies the other that, in its reasonable opinion: has or will have a material adverse effect on that party in the context of a Transaction. The notifying party must, if requested to do so by the other party, provide an […]

The “Repurchase Price” is the amount paid by the Seller to the Buyer on the “Repurchase Date”.  Any failure to do so constitutes an Event of Default for the purposes of the GMRA.  It is easiest to think of the “Repurchase Price” in terms of a loan transaction.  In these circumstances, the “Repurchase Price” would […]

There has been a long-standing concern that banks are not fully complying with obligations to revise and refresh their netting opinions. Credit institutions are fully incentivised to comply with these requirements by the significant capital “savings” if netting is applicable. However, the same obligations apply to the buy side- at least those entities who are […]

Often referred to as “the most important contract in the world”, the primary purpose of the ISDA MA is to allow close-out with netting. While almost innumerable legal opinions exist to give some comfort to netting, the actual mechanics of close-out have been long due a major overhaul. The 2002 update to the ISDA MA […]

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 […]