An introduction to repo and the Global Master Repurchase Agreement (GMRA)
Produced in partnership with Joseph Wren of Travers Smith and Jonathan Gilmour of Travers Smith

The following Banking & Finance practice note produced in partnership with Joseph Wren of Travers Smith and Jonathan Gilmour of Travers Smith provides comprehensive and up to date legal information covering:

  • An introduction to repo and the Global Master Repurchase Agreement (GMRA)
  • What is repo?
  • Purchase Date:
  • Repurchase Date:
  • What is the difference between repo and securities lending?
  • Why do parties use repo?
  • Secured cash financing
  • Creating leverage
  • Covering a short position
  • Key legal issues relating to repos
  • More...

An introduction to repo and the Global Master Repurchase Agreement (GMRA)

Coronavirus (COVID-19): This Practice Note contains information on subjects potentially impacted by the government and regulators' responses to the coronavirus (COVID-19) outbreak. We are reviewing our content on the basis of information available and will keep it under regular review. For information on key developments and related practical guidance on the implications for lawyers, see: Coronavirus (COVID-19) toolkit and Practice Note: Coronavirus (COVID-19)—implications for structured products and securitisation transactions.

What is repo?

Repo is the market term for a ‘repurchase transaction’, which involves the sale of an asset by one party (the seller) to another party (the buyer) with a simultaneous agreement between the parties that the seller will repurchase the asset from the buyer at a future date for a specified price.

Any asset that is capable of being transferred from one person to another may be subject to repo. The most common types of asset that are repo’d are debt securities (bonds), equity securities (shares) and other financial assets such as loans and commodities. Commodity repos give rise to particular documentary, structural and legal issues which are not covered in this Practice Note. For information on commodity repos, see Practice Note: Commodity repo transactions and true sale considerations.

The principal payment and delivery obligations in a typical repo are set out in the diagram below:

Purchase Date:

Repurchase

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