ISLA and ICMA publish GMRA Digital Assets Annex
19 August 2024 Switzerland
Image: Andrii/stock.adobe.com
The International Capital Market Association (ICMA) has published the Digital Assets Annex, which is a new addition to the Global Master Repurchase Agreement (GMRA).
ICMA prepared the annex as part of a joint project with the International Securities Lending Association (ISLA), Clifford Chance, and the Digital Assets Legal Working Group.
The aim is to bring consistency to the legal terms used by market participants when trading certain digital assets under the GMRA 2011 and 2010.
According to ICMA, the Digital Assets Annex provides a standardised framework and set of terms which can be used to document repo transactions involving digital cash, digital securities (including tokenised traditional securities), or asset-backed digital assets.
Deena Seoudy, senior director and associate counsel at ICMA, says: “This Annex represents a significant milestone in the evolution of the GMRA, and we are confident it will support the continued growth and innovation of digital assets within the repo market.”
The annex clarifies that in the GMRA 2011, references to securities include platform transferred securities, and references to cash or currency encompass digital cash.
It also addresses some of the commercial considerations arising from the operational feasibility of intraday repo transactions, which have been enabled by digital assets and technological platforms operating on shorter settlement times.
According to Michael Brown, partner at Clifford Chance, the annex leverages the experience of the working group, with respect to the opportunities in the securities finance market presented by technological developments over the past few years.
He adds: “We hope the Digital Assets Annex will assist the further growth of the market by presenting a common approach that firms can leverage for transactions referencing the relevant categories of digital asset."
In September, ICMA and Clifford Chance will run a webinar to provide an overview of how the annex works and its various features, as well as an opportunity for ICMA members to ask any questions.
ICMA prepared the annex as part of a joint project with the International Securities Lending Association (ISLA), Clifford Chance, and the Digital Assets Legal Working Group.
The aim is to bring consistency to the legal terms used by market participants when trading certain digital assets under the GMRA 2011 and 2010.
According to ICMA, the Digital Assets Annex provides a standardised framework and set of terms which can be used to document repo transactions involving digital cash, digital securities (including tokenised traditional securities), or asset-backed digital assets.
Deena Seoudy, senior director and associate counsel at ICMA, says: “This Annex represents a significant milestone in the evolution of the GMRA, and we are confident it will support the continued growth and innovation of digital assets within the repo market.”
The annex clarifies that in the GMRA 2011, references to securities include platform transferred securities, and references to cash or currency encompass digital cash.
It also addresses some of the commercial considerations arising from the operational feasibility of intraday repo transactions, which have been enabled by digital assets and technological platforms operating on shorter settlement times.
According to Michael Brown, partner at Clifford Chance, the annex leverages the experience of the working group, with respect to the opportunities in the securities finance market presented by technological developments over the past few years.
He adds: “We hope the Digital Assets Annex will assist the further growth of the market by presenting a common approach that firms can leverage for transactions referencing the relevant categories of digital asset."
In September, ICMA and Clifford Chance will run a webinar to provide an overview of how the annex works and its various features, as well as an opportunity for ICMA members to ask any questions.
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