New ICMA Guide to Best Practice in the European Repo Market
In December 2017, ICMA updated its decade old repo trading practice guidelines in a brand new document that significantly updates the old guidelines and consolidates them with various other ICMA publications. The new guide sets out best practice in initiating, margining and managing the life cycle of a repo. It also contains various annexes that (i) assist in understanding repo and the repo market; (ii) contain a useful glossary of repo terms; (iii) explain open, evergreen and extendible repo; and (iv) provide suggested forms of mini close-out notice and confirmation.
There is no substitute for a thorough review of the new guide. Nevertheless, and for the benefit of negotiators, we include in the table below a selection of best practice recommendations that immediately impact the documentation of repo using a standard form GMRA and/or confirmations thereunder. Some of these are motivated by recent case law and others by developments in market practice. They are over and above the usual negotiating points that arise under a GMRA. For further reading and background, see Repo and Stock Lending: A Practitioner's Guide (Globe Law and Business 2015).
Please contact your usual derivatives partner for further advice or assistance.