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- ICMA GMRA legal opinions
Find out more about the GMRA
Background
For many years, ICMA has obtained and annually updated legal opinions on the Global Master Repurchase Agreement (1995 & 2000 versions, as well as the 1995 version as amended by the Amendment Agreement to the 1995 version) from numerous jurisdictions worldwide. For more information on GMRA, click here.
2018 GMRA legal opinions
The 2018 GMRA legal opinions opine on the GMRA 1995, 2000 and 2011 versions (as well as the 1995 version as amended by the Amendment Agreement to the 1995 version and the 1995, 2000 and 2011 versions as amended by the 2011 ICMA GMRA Protocol (Revised)) (the “GMRA”). Please see below for a list of jurisdictions.
ICMA members were informed about the publication of the 2018 GMRA Opinions in ICMA circular No. 1 dated April 11, 2018.
Beneficiaries
The 2018 GMRA legal opinions have been obtained by ICMA, for the benefit of ICMA and its members1.
Scope
The 2018 GMRA legal opinions cover both the enforceability of the netting provisions of the GMRA as well as the validity of the GMRA as a whole.
Furthermore, the opinions address the issue of recharacterisation risk (in respect of both the transfer of securities and the transfer of margin).
The UK Prudential Regulation Authority (PRA), the UK Financial Conduct Authority (FCA) and the German Financial Supervisory Authority (BaFin) recognise the effect of netting provisions for regulatory capital and large exposure requirements provided, inter alia, that a reasoned legal opinion has been obtained to the effect that, in the event of a legal challenge, the relevant courts and administrative authorities would find that, where a counterparty fails owing to default, bankruptcy, liquidation or any other similar circumstance, the regulated firm’s claims and obligations pursuant to the GMRA would be limited to a net sum under the law of the relevant jurisdiction(s), and which meets certain other requirements. The opinions which ICMA makes available to its members assist them in fulfilling these regulatory requirements. It remains the responsibility of each member individually to ensure that it meets its specific regulatory requirements.
Members must ensure that the specific opinions on which they seek to rely extend to their particular circumstances and satisfy themselves as to the strength of the opinions and the effect of the assumptions and qualifications contained therein.
Format
As in previous years, the opinions have been obtained in a combined format, covering the GMRA on the one hand and the Overseas Securities Lender’s Agreement (October 1994 version), Overseas Securities Lender’s Agreement (December 1995 version), Master Gilt Edged Stock Lending Agreement (1996 versions) and the Global Master Securities Lending Agreement (May 2000, July 2009 and January 2010 versions) (the "SLAs”) on the other (except for the opinions on India, Russia and Slovenia, which are GMRA only opinions) and consist of the following parts:
(i) core opinion covering both the GMRA as well as the SLAs (the “Core Opinion”);
(ii) specific appendix covering the GMRA (the “GMRA part”); and
(iii) specific appendix covering the SLAs (the “SLAs part”).
ICMA makes available to its members the Core Opinion together with the GMRA part.
The Core Opinion together with the SLAs part will be available to ISLA members who are also members of the ISLA Netting Opinion Subscriber Group and accessed via aosphere LLP's website (www.aoslogin.com). For further information contact ISLA at admin@isla.co.uk.
ICMA members may download the 2018 GMRA legal opinions and, where available, respective blacklines tracking the amendments to the 2017 opinions, by clicking here.
A list of the jurisdications covered by the GMRA legal opinions can be found at the bottom of this page.
Coverage of the GMRA legal opinions from 2019
With the support of the ERCC Committee, ICMA will discontinue coverage of the GMRA 1995 in the GMRA legal opinions from 2019 onwards. The GMRA legal opinions will continue to cover the GMRA 1995 as amended by the Amendment Agreement and the GMRA 1995 as amended by the 2011 GMRA Protocol (subject to certain elections being made).
1 Whilst associate members of ICMA have access to the ICMA legal opinions, the opinions are not addressed to associate members and therefore they cannot rely on them.
