Gmra Agreement 2000

The GMRA Agreement 2000: A Comprehensive Guide

The Global Master Repurchase Agreement (GMRA) is a standard documentation framework for repurchase agreements (repos) used in the global financial market. It was first published in 1992 and has since been updated several times, with the latest version being the GMRA Agreement 2000.

This agreement is widely used by financial institutions and market participants worldwide for a variety of reasons, including its standardization, market acceptance, and legal enforceability in many jurisdictions. Below is a comprehensive guide to the GMRA Agreement 2000 and its key features.

Overview of the GMRA Agreement 2000

The GMRA Agreement 2000 is a standard repo agreement that outlines the terms and conditions of a transaction between two parties: the seller (the counterparty who sells the securities) and the buyer (the counterparty who buys the securities). It also establishes the conditions for the transfer of ownership of the securities from the seller to the buyer and the subsequent repurchase of the securities at a later date by the seller.

The GMRA Agreement 2000 covers a wide range of securities, including government bonds, corporate bonds, equities, and derivatives. It also includes provisions for cross-border repos, collateral management, and indemnification.

Key Features of the GMRA Agreement 2000

1. Standardization

The GMRA Agreement 2000 is a standardized document that contains all the necessary terms and conditions for a repo transaction. This standardization reduces the negotiation time and costs for market participants and increases market efficiency.

2. Collateral Management

The GMRA Agreement 2000 provides detailed guidelines for collateral management, which is the process of managing the collateral posted by the seller to secure the repo transaction. This includes the types of collateral that can be used, the valuation of the collateral, and the procedures for margin calls.

3. Cross-border transactions

The GMRA Agreement 2000 includes provisions for cross-border repos, which facilitates the movement of securities across different jurisdictions. This allows market participants to access a wider range of securities and financing options, increasing market liquidity and efficiency.

4. Indemnification

The GMRA Agreement 2000 includes provisions for indemnification, which protects market participants against losses arising from the breach of contract or other legal issues related to the repo transaction. This protection gives market participants greater confidence in the repo market, thereby increasing market liquidity and efficiency.

Conclusion

The GMRA Agreement 2000 is a comprehensive and widely accepted documentation framework for repo transactions in the global financial market. Its standardization, collateral management provisions, cross-border transaction guidelines, and indemnification provisions make it a valuable tool for market participants looking to engage in repo transactions. By using this agreement, market participants can benefit from increased market efficiency, liquidity, and confidence.