The International Securities Lending Association (ISLA) has released the 2022 netting opinions that support the Global Master Securities Lending Agreement (GMSLA) for transfer of title-based securities lending transactions.
ISLA indicates that its 2022 legal opinions have been finalised through a joint venture with the International Capital Market Association (ICMA) and are available to ISLA members that subscribe to the ISLA netting opinions service.
Its Master Confirmation Annex (MCA), which was released in November 2021 to support the GMSLA suite of documentation, has been covered in five jurisdictions, namely England, France, Germany, Switzerland and the Netherlands. This MCA offers a standard framework and set of terms that can be employed for “non-standard” trades such as evergreens and extendables.
ICMA has also announced publication of legal opinions which provide the foundation for use of the Global Master Repurchase Agreement (GMRA), the most widely employed legal agreement for international repo trades.
ICMA observes that financial regulators require securities finance transactions to be documented under robust written legal agreements like the GMRA, supported by legal opinions which are regularly updated, as a condition for recognising credit risk mitigation through exchange of collateral and use of close-out netting in calculating regulatory capital requirements.
It notes that these opinions provide ICMA members with exclusive access to a comprehensive body of legal guidance relating to the enforceability of the GMRA, and particularly GMRA netting provisions, in more than 60 jurisdictions.
