The International Capital Markets Association (ICMA) has published a strategy paper that evaluates steps to promote standardisation of industry-negotiated repo documentation.
The Association notes that the rising need for legal agreement data for downstream systems, including collateral, risk, pricing and capital decisions, is driving market participants to create their own data representations, despite the need for consistent data representation as industry infrastructure expands.
This trend has resulted in multiple house styles for master agreement templates, with firms employing differing formatting and describing common business outcomes in a variety of different ways.
To address this concern, ICMA released a Global Master Repurchase Agreement Clause Taxonomy and Library project in October 2021, delivering a library of model wordings that can be used to draft business outcomes in a standardised way across the industry.
The strategy paper, which has been released in collaboration with D2 Legal Technology, evaluates the work done to date on the GMRA Clause Taxonomy and Library project, outlines the next stages in the project and the role that market participants need to play to make this initiative successful.
ICMA encourages all its members to share their ideas and input to the project to “build on the key role GMRA documentation plays in repo trading. This is the time to embrace the enhanced benefits of a digital documentation approach to the GMRA,” it says.
In September 2021, The International Securities Lending Association (ISLA) announced the launch of the ISLA Clause Taxonomy and Library to guide standardisation of industry-negotiated securities lending transaction documentation, including the Global Master Securities Lending Agreement (GMSLA). This ISLA Clause Taxonomy and Library was also developed in association with technology partners D2 Legal Technology.
