GMRA Anatomy

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GMRA Anatomy
Top Trumps®

Financial Weapons of Mass Destruction®



Formal styling: Global Master Repurchase Agreement
Tagline: “Let's go get sushi and not pay!
Documentation: Standard 2000 GMRA. Vague where it needs to be and not heavily negotiated. (5)
Definitions booklets: Nope. (1)
Adaptability: Well, you can have fun doing a stock loan under a repo master and vice versa if you must but otherwise, no, very standard. (3)
Asset classes: Bonds, cash. Equities at a stretch. (3)
Amendability: Bilateral, so yes, in theory — but would you, unless MiFID changed and you had to? (4)
Transferability: Niente. Bilateral contract. You could Novate, but really why would you? (2)
Tenor: Short - typically no more than a month. But at least it has a tenor. So better than a stock loan.(3)
Leverage: Fully collateralised, so nope. (1)
Collateral: Yes. (6)
Longevity: Repos have been around for ages and they'll be around for ages. (10)
Overall frightometer rating: Sorry: not going to get hearts racing. (1)
See template

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What is a repo?

In a NutshellTM: A repo, or repurchase agreement, and its close relation the sell/buy-back[1], is a way of borrowing government bonds.

Documentation: Repos are most commonly documented under a 2000 Global Master Repurchase Agreement, the industry standard English law agreement, published by TBMA and ICMA

Structure: Repos are structured as a spot DVP sale at market, and a later DVP repurchase, also at market, of the same securities (hence, “repurchase”). In any case there is always a cash leg — by which the “Buyer” pays for the govvies — and a securities leg — by which the Seller delivers them. Contrast that with a stock loan where both the Loan and the Collateral leg are physical settlements of securities.

Term: Repo trades are usually very short term, typically overnight.

Reverse repo: a reverse repo is just a repo from the point of view of the buyer. The Buyer buys and agrees to sell back later; the Seller sells and agrees to buy back later.

Does a repo count as borrowed money?

According to Simon Firth on derivatives, no. Nor does a stock loan.


1. Applicability
2. Definitions
3. Initiation; Confirmation; Termination
4. Margin Maintenance
5. Income Payments
6. Payment and Transfer
7. Contractual Currency
8. Substitution
9. Representations
10. Events of Default
11. Tax Event
12. Interest
13. Single Agreement
14. Notices and Other Communications
15. Entire Agreement; Severability
16. Non assignability; Termination
17. Governing Law
18. No Waivers, etc.
19. Waiver of immunity
20. Recording
21. Third Party Rights

See also