The French Banking Federation (Fédération Bancaire Française or FBF) released a new version of its master agreement for repurchase transactions (the 2025 FBF Repo Agreement).
An important innovation is the introduction of the concept of “default value” for close-out valuation purposes, replacing the previous reliance on “market value”. Modelled on the GMRA’s “default market value”, this addition provides greater flexibility in volatile or illiquid markets where reliable market quotations may not be available.
When determining the value of the securities in a close-out scenario, the calculating party may now rely on prices actually obtained in buying or selling all or part of the relevant securities, as well as bid or offer quotations, and where no reliable quotations are available, or where it would be commercially unreasonable or impossible to rely on them, the calculating party may instead determine the fair market value of the securities.
This is the first update since 2007 and reflects legal and regulatory developments such as those under the EU Securities Financing Transactions Regulation (SFTR) as well as market-driven amendments aimed at promoting convergence with international standards, particularly the Global Master Repurchase Agreement (GMRA).