ICMA: Digitising legal documentation for future repo market efficiency

The repo market, valued at over EUR 9,000 billion at year end 2021 is essential to the functioning of financial markets, allowing cash and collateral to be moved efficiently around the system. Standardisation of the documentation to enable repo trading has been critical to the growth of the market, with the Global Master Repurchase Agreement (GMRA)  becoming the most widely used master trading agreement in the international market providing a basis on which to negotiate the trading relationship between two parties.

Digitisation of the GMRA is an important step towards achieving future automation and efficiencies in negotiating repo transactions. Recognising the need for consistent representation of legal data, ICMA launched the GMRA Clause Taxonomy and Library Project in October 2021, to explore the benefits of a catalogue of GMRA clauses and their negotiated business outcomes, together with a library of model wordings that could be used to draft for such outcomes in a standardised way across the industry.

ICMA has published a strategy paper which explores the potential to drive consistent wording across industry negotiated repo documentation, thereby improving the efficiency of the documentation process and assisting with the management of legal agreement data. The paper, produced in collaboration with D2 Legal Technology (D2LT) outlines the work undertaken so far on the GMRA Clause Taxonomy and Library Project and scopes out the tasks that remain.

Industry participants are strongly urged to participate in ICMA’s GMRA Clause Taxonomy and Library Working Group to contribute to this transformational project, building on the key role GMRA documentation plays in repo trading.

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