Clearstream sidesteps GMRA with new repo agreement
31 May 2013 Luxembourg
Image: Shutterstock
Clearstream has designed a new legal master agreement for triparty repo transactions, with the aim of bypassing tedious individual agreements.
The new master agreement hopes to speeds up counterparty marriage broking, enabling customers to sign just one document that is applicable for any number of counterparties.
“We're finding more new customers are keen to come into triparty repo—corporates, for example—but some are put off because of the delays in making individual agreements with each of their intended counterparties. Our aim was to provide a simplified framework to enable them to take advantage of triparty repo much quicker,” said a spokesperson.
Clearstream has designed and paid for a master agreement that will cover all counterparties who sign it, avoiding individual negotiations. The agreement is under Luxembourg law, opposed to the Global Master Repo Agreement—first published in 1992 and governed by English law—and is posed as an alternative for newcomers to the market.
“Triparty repo’s high level of security and efficiency make it a popular secured money market tool with many of our clients,” said Pascal Morosini, global head of GSF sales and relationship management for Clearstream.
“However, some new market players are deterred by the existing contract process requiring them to negotiate bilateral master repurchase agreements with all their counterparties ... We fully understand the problem: who wants to wait a year to sign only two trading counterparties?”
Clearstream’s repurchase conditions (CRC) permit the participation of multiple counterparties within a few weeks.
The firm also announced that it is making available on demand and free-of-charge a number of legal opinions covering several jurisdictions addressing questions on netting and set-off provisions, enforceability, and insolvency proceedings.
The new master agreement hopes to speeds up counterparty marriage broking, enabling customers to sign just one document that is applicable for any number of counterparties.
“We're finding more new customers are keen to come into triparty repo—corporates, for example—but some are put off because of the delays in making individual agreements with each of their intended counterparties. Our aim was to provide a simplified framework to enable them to take advantage of triparty repo much quicker,” said a spokesperson.
Clearstream has designed and paid for a master agreement that will cover all counterparties who sign it, avoiding individual negotiations. The agreement is under Luxembourg law, opposed to the Global Master Repo Agreement—first published in 1992 and governed by English law—and is posed as an alternative for newcomers to the market.
“Triparty repo’s high level of security and efficiency make it a popular secured money market tool with many of our clients,” said Pascal Morosini, global head of GSF sales and relationship management for Clearstream.
“However, some new market players are deterred by the existing contract process requiring them to negotiate bilateral master repurchase agreements with all their counterparties ... We fully understand the problem: who wants to wait a year to sign only two trading counterparties?”
Clearstream’s repurchase conditions (CRC) permit the participation of multiple counterparties within a few weeks.
The firm also announced that it is making available on demand and free-of-charge a number of legal opinions covering several jurisdictions addressing questions on netting and set-off provisions, enforceability, and insolvency proceedings.
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