What is a master repurchase agreement?

Master repurchase agreements are agreements for the purchase and sale of securities that have the economic effect of permitting a seller of securities to receive a collateralized loan from the buyer of such securities.

What is the difference between MRA and Gmra?

Failure to satisfy margin maintenance obligations is an event of default under both the MRA and the GMRA. However, in the MRA, there is no cure period for a margin default, whereas the GMRA provides for notice to be given to the party who has failed to satisfy the call before an event of default can be triggered.

What is the difference between securities lending and repo?

A key difference between repo and securities lending is that the repo market overwhelmingly uses bonds and other fixed-income instruments as collateral, whereas an important segment of the securities lending market is in equities. And securities lending is sometimes used by securities investors to raise cash.

What is a Master securities forward transaction agreement?

The Master Securities Forward Transaction Agreement (the “MSFTA”) is a master agreement enabling the purchase and sale of forward and other delayed delivery securities. The first version of the MSFTA was published by the Securities Industry Financial Market Association (“SIFMA”) in 1996.

What are repurchase facilities?

A repurchase facility (“Repurchase Facility”) is a financing arrangement pursuant to which a bank or other credit institution (a “Buyer”) provides liquidity to an entity that originates or acquires real estate related assets (a “Seller”) by purchasing such assets with a simultaneous agreement that the Seller will …

What is the difference between ISDA and Gmra?

The ISDA scheme of contract is a master agreement, which manages various confirmations of individual swap transactions or of other derivatives related to a notional. The GMRA scheme of contract is a standard master agreement for REPO transactions, which also in Italy can be qualified as a netting agreement.

What is repo used for?

The repo market allows financial institutions that own lots of securities (e.g. banks, broker-dealers, hedge funds) to borrow cheaply and allows parties with lots of spare cash (e.g. money market mutual funds) to earn a small return on that cash without much risk, because securities, often U.S. Treasury securities.

Is a repurchase agreement a loan?

A repurchase agreement (RP) is a short-term loan where both parties agree to the sale and future repurchase of assets within a specified contract period. The seller sells a Treasury bill or other government security with a promise to buy it back at a specific date and at a price that includes an interest payment.