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2000 Global Master Repurchase Agreement
A Jolly Contrarian owner’s manual™
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Paragraph 5 in a Nutshell™
Use at your own risk, campers!
Full text of Paragraph 5
5. Income Payments
Unless otherwise agreed -
- 5(i) where the Term of a particular Transaction extends over an Income Payment Date in respect of any Securities subject to that Transaction, Buyer shall on the date such Income is paid by the issuer transfer to or credit to the account of Seller an amount equal to (and in the same currency as) the amount paid by the issuer;
- 5(ii) where Margin Securities are transferred from one party (“the first party”) to the other party (“the second party”) and an Income Payment Date in respect of such Securities occurs before Equivalent Margin Securities are transferred by the second party to the first party, the second party shall on the date such Income is paid by the issuer transfer to or credit to the account of the first party an amount equal to (and in the same currency as) the amount paid by the issuer;
and for the avoidance of doubt references in this paragraph to the amount of any Income paid by the issuer of any Securities shall be to an amount paid without any withholding or deduction for or on account of taxes or duties notwithstanding that a payment of such Income made in certain circumstances may be subject to such a withholding or deduction.
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Related agreements and comparisons
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Related agreements: Click here for the same clause in the 1996 MRA, when we get round to finding out the first thing about it.
Comparison: Knowing and, really, caring very little about other kinds of repo agreement, we have nothing presently to compare the Global Master Repurchase Agreement with.
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Content and comparisons
Summary
The amount by which ICMA’s crack drafting squad™ managed to balls up a really simple idea — that you have to pay over whatever you get on what you hold, on the day you get it, grossed up — is really quite remarkable. Some ninja work here, make no mistake.
Detail point: The manufacture of income, versus the accrual and payment of income, is the key difference between a Repo and a Buy/Sellback Transaction. Under a repo you manufacture income; under a buy/sellback you accrue interest.
See also
References