Repo and Securities Lending: The GMRA and GMSLA Provisions

£695.00 +VAT

This course can be presented in-house via live webinar.

Repo and Securities Lending: The GMRA and GMSLA Provisions Course Content:


The Legal and Economic Characteristics of Repos

  • Definition of a Repo
  • “True Sale” title transfer
  • Rehypothecation
  • Enforcement
  • Substitution
  • Similarities to Secured Loans
  • Cashflows
  • Definitions and Terminology (Jargon):
    • Haircuts
    • Income
    • Manufactured Payments
    • Repo Rates
    • Pricing Rates
  • Fungibility issues
  • Uses of Repos:
    • 4 basic functions:
      • Secured Financing
      • Covering Long or Short positions
      • Monetary Policy Instruments
      • Creating Leverage
    • Types of Securities used in Repos:
      • Government bonds
      • High grade bonds
      • Credit Repos
    • Participants in the Repo Market
      • Buyer’s side
      • Seller’s side
    • Types of Repos and similar transactions
    • Distinguishing Characteristics of Repos
    • Risks in a Repo
      • Counterparty credit risks
      • Collateral risks
      • Transferability
      • Collateral Management
      • Legal Certainty
    • Mitigation of Counterparty Credit Risks
      • Margin Ratio
      • Margin Collateral
      • Set off



  • Architecture of the GMRA documentation
    • Versions
    • Annexes
    • Confirmation
    • Market Protocols and Guidelines
      • 2011 GMRA Protocol
      • ICMA ERC Guide July 2015
      • Securities Borrowing and Lending Code of Guidance
  • ESMA Guidelines on repo and reverse repo agreements for UCIT Funds
  • Reasons for the GMRA
    • Recharacterisation risks
    • Margining
    • Event of Default Procedures
    • Netting Rights
    • Basel III Capital Requirements
    • Operational Benefits
    • Harmonisation
    • Use in Structured Transactions
    • Legal Opinions


  • Key Obligations under the GMRA
    • Initial Exchange
    • Income Payments
    • Payment/delivery of Margin
    • Final Exchange
  • Key Provisions and Considerations:
    • Collateral Selection
    • Events of Default
      • Consequences of Failure to Deliver:
        • at start of a repo
        • at end of a repo
      • Standard Events of Default
      • Default Notices
      • Close-out: 3 stages
      • Valuation Procedures
      • Consequential Losses
    • Negative Repo Rates
      • Definition
      • Circumstances when this occurs
      • Problems caused
    • Repo Rate Indices
      • STOXX GC Pooling Indices
      • The GCF Repo Index
      • Gov PX
      • The RepoFunds Rate
      • The Repo Overnight Index Average (RONIA)
    • Accounting Treatment of Repos
      • Balance sheet treatment not aligned with legal form
      • Lehman Brothers’ Repo 105 and MF Global under US GAAP
      • IFRS
    • Short-selling
      • What is it?
      • Essential functions
      • Risks of short-selling
      • Uncovered short-selling and market abuse
      • EU Short Selling Regulations
    • Shadow Banking
    • The Central Clearing Counterparties (CCPs)
      • The functions of the CCPs
      • Benefits of using CCPs
      • The Principal CCPs in Europe
      • Repo trading systems
  • Pro-cyclicality
  • CSD Regulation (CSDR)
    • Application
    • Exemptions
    • Benefits

Levels of Activity in the European Repurchase Agreement Market

  • Trading – How repos are trades are negotiated and executed
    • Direct trading
    • Automated Trades
    • ATSs
    • The ATSs operating in Europe
  • Clearing – Netting by repo parties
    • Uncleared trades
    • Bilaterally cleared trades
    • Multilaterally cleared trades
  • Collateral Management – Delivery and Maintenance
    • Bilateral
    • Tri-party

Step by Step Process of How a Repurchase Agreement Trade is Done

  • Establish identity of counterparty – Legal Entity Identifier (LEI)
  • Establish whether parties dealing as principal or agent
  • Key economic terms and post-trade checks
  • How to quote repo rate
  • How to work out Purchase Price – dirty price inclusive of haircut
  • Fixing Purchase and Repurchase Dates
    • For non-forward repos
    • For forward repos
  • Allocating collateral and agreeing pricing
  • Negotiating rights of substitution
  • Interest rates and charges on late payments
  • Post-trade verification process
  • Confirmation
  • Affirmation
  • Recommended Delivery Size
  • Partial Delivery – Exercising Mini-Close Outs
  • Dealing with Negative Repo Rate issues
  • Interest on Cash Margin
  • Calculating Floating-Rate Repo Interest
    • Method 1 – Ultimate Day Crystallisation
    • Method 2 – Penultimate Day Crystallisation
  • Calculating Open Repo Interest
  • Margining:
    • Fixing Haircut
    • Calculating Margin Calls
    • Calculating Transaction Exposure
    • The Price used to Value Collateral
    • Margin Thresholds
    • Deadlines for Margin Calls and Delivery
    • Applying Haircuts to Margin Securities
    • Interest Payments on Cash Margin


  • EU Financial Collateral Directive
  • Short Selling Regulations
  • EMIR
  • CSDR (Central Securities Depositories Regulation)
  • MiFID II
  • TARGET-2 Securities (T2S)


  • What is Securities Lending?
  • Reasons for Securities Lending
  • The Parties Involved
  • Legal Structure
    • Initial Exchange
    • Mark to market/top-up
    • Title Transfers
    • Voting Rights
  • Risks
    • Legal Risks
      • Capacity
      • Netting/Set-off Opinions
      • Recharacterisation
      • Governing Law and Insolvency Laws
    • Regulatory Risks
    • Credit Risks
    • Market Risks


  • The ISLA
  • The Global Master Securities Lending Agreement (GMSLA) – versions
  • Industry Guidances:
    • SLRC – Securities Borrowing & Lending Code of Guidance
    • ISLA EU Agency Lending Best Practice Paper
    • UK Agency Lending Code of Guidance
    • Checklists for Lenders
  • Architecture of the GMSLA documentation
  • Benefits of using a GMSLA
  • Key Provisions
    • Initial Exchange
    • Manufactured Payments
    • Marking to market of Collateral
    • Events of default
    • Representations and warranties


  • The Stock Exchange Rules
  • RAO under FSMA
  • The Disclosure and Transparency Rules
  • Financial Collateral Arrangements
  • Shadow Banking concerns


  • Scope of the SFTR
  • Exemptions from the SFTR
  • Definition of SFTs
  • Key Requirements of the SFTR
    • The Reporting Obligation
    • Trade Repository Registration and Supervision
    • Investor Transparency
    • Periodical Information To Be Provided
    • Rehypothecation
  • Administrative Sanctions and Measures

Repo and Securities Lending: The GMRA and GMSLA Provisions Course Summary:

This course provides full coverage of the important aspects of Repurchase Agreement trading and the pertinent issues involved in Securities Lending. It is relevant for in-house lawyers and private practice lawyers alike as well as bankers and Repurchase Agreement traders involved in anything from the day to day business as usual plain vanilla repos to the more complex heavily negotiated repo trades involving structured securities or unusual assets. This course will also be relevant to the Operations and Documentation teams involved in repo transactions from time to time, structurers, compliance personnel as well as accountants who advise clients on repo trades.

The first part of this course sets the scene by giving an introduction to repos; the development of the repo market in Europe, the legal and economic characteristics of repos, the definitions and terminology ‘jargon’ that is commonly used in the repo market and the uses and benefits of repos. We then go through the various types of repo products in the market and discuss the risks, mitigants and distinguishing characteristics of repos.

The second part of the course covers the architecture of the GMRA documentation framework. Here we will go through the key provisions of the GMRA and discuss topical issues relating to and affecting the repo market. We will go on to discuss the 3 levels of activity in the repo market followed by a detailed step by step analysis of how a repo trade is negotiated and executed. We then cover the pertinent issues in the regulation of the repo market in Europe.

The third part of the course will cover an overview of Securities Lending; what it is, the reasons for it, the parties involved in it and the advantages and disadvantages for using it. We will discuss the legal structure and the various risks involved in Securities Lending. We will then go on to analyse the GMSLA documentation and the key provisions. We will undertake an analysis of the relevant case law in this area following which we will discuss the regulations effecting Securities Lending and the upcoming regulatory changes and considerations to be aware of. We will specifically discuss the much talked about Securities Financing Transactions Regulation (SFTR), its requirements and the timeline.

Please note that the sections on regulations are subject to change depending on the time of the year this training course is delivered as per the regulations and guidance that are published from time to time.

Complimentary materials including content filled presentation slides, the GMRA and relevant articles will be provided to all participants.

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5-6 participants – 20% discount,7-8 participants – 25% discount,Over 9 participants – 30% discount