In a joint project, the International Capital Market Association (ICMA) and International Securities Lending Association (ISLA) published the Digital Assets Annex (DAA) as a new addition to the Global Master Repurchase Agreement (GMRA).
It aims to bring consistency to the legal terms used by market participants when trading certain digital assets under the GMRA 2011 and GMSLA 2010. The DAA was developed by the Digital Assets Legal Working Group run by ICMA & ISLA, with Clifford Chance appointed as counsel.
DAA provides a standardized framework and set of terms which can be used to document repo transactions involving digital cash, digital securities (including tokenized traditional securities), or asset-backed digital assets.
DAA clarifies that in the GMRA 2011, references to Securities includes Platform Transferred Securities, and references to cash or currency encompasses Digital Cash. The Annex also seeks to address some of the commercial considerations that arise as a result of the operational feasibility of intra-day repo transactions, which have been made possible by the shorter settlement times offered by digital assets and technological platforms.
Michael Brown, partner at Clifford Chance, said in a statement that the Annex “leverages the experience of the working group in respect of the opportunities in the [Securities Financing Transactions] market presented by technological developments over the last few years” and that he hoped it “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”.
Deena Seoudy, senior director and associate counsel at ICMA, said in a statement: “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.”