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S7C Repurchase Agreements (Repo) Training Programme©


This comprehensive intermediate to advanced level modular programme will instruct attendees on a wide range of financial, operational, risk, and legal issues affecting repurchase (repo) markets today. The training programme can be specifically tailored to meet a company's training needs by allowing companies to choose from a diverse range of 8 Modules covering European Union (EU) and United States (US) repo frameworks. A company can opt for a 1 day (4 Modules) or a 2 day (8 Modules) training programme. Attendees will be guided through the repo market framework, including market structure, credit risk, collateralisation issues, and the legal repo architecture. Attendees will also be trained in all the key Global Master Repurchase Agreement (GMRA) provisions and repo terminology, and will be able to put into practice knowledge gained in a practical repo workshop that can be designed to match the company's underlying objectives.   

Days 1 to 2

Module 1: An Overview of EU Repo Markets

  • Best Practice: International Capital Market Association (ICMA) European Repo Council (ERC) Guide to best practice in the European Repo Market.
  • Update: Efforts to harmonise repo trade matching and affirmation.
  • Market surveys: Insights from a range of repo market surveys.
  • Latest debate: Haircuts and initial margins in the repo market.

Module 2: An Overview of US Repo Markets

  • Best Practice: Government Finance Officers Association (GFOA) Best Practice (Monitoring the Value of Securities in Repurchase Agreements; Establishing a Policy for Repurchase Agreements, Ensuring the Safety of Reverse Repurchase Agreements).
  • Update: Efforts to increase bond market liquidity and decreased repo market risk.
  • Market surveys: Insights from a range of repo market surveys.
  • Latest debate: Critiquing the impact of Central Counterparty (CCP) margin policies on repo markets. 

Module 3: The Repo Operating Framework: Market Structure and Conduct

  • Repo market structure (counterparty risk, venues, clearing, settlement, custody, market policies) and conduct (pricing, arbitrage, codes of conduct, market associations).
  • European tri-party repos and systems, US tri-party repos and markets, and clearing repos through CCPs.
  • Repo functionality and types (tri-party, deliverable, held in custody, overnight, term, open, flex, equity, due bill, whole loan, sell/buy, reverse).
  • Role of the Collateral Agent (custodian bank, clearing organisation).

Module 4: The Repo Operating Framework: Legal Architecture INTERMEDIATE

  • Standardised and Non-Standardised Master Repurchase Agreements.
  • An overview of the ICMA/SIFMA 2011 Global Master Repurchase Agreement (GMRA).
  • An Overview of GMRA Legal Opinions (1995, 2000, 2011, 2015) and their substantive content (netting enforceability, general validity, re-characterisation risk for transfer of securities and margin).
  • GMRA Annexes (Agency; Bills; Buy/Sell Back; Canadian; Equities; Italian; Russian). 

Module 5: The Repo Operating Framework: Legal Architecture ADVANCED

  • Repo Master Agreement transaction linkage, close-out netting, payment netting.
  • Analysing Key GMRA repo documentation provisions (Termination, Margin Maintenance, Income Payments, Events of Default, Representations, Tax Events, and Substitution).
  • Key Market Modifications to GMRA documentation (Automatic Early Termination, Confirmations, Cross Default, Custody, Events of Default, Set-Off, Margin Thresholds).
  • An Overview of Gilt Repo Legal Agreement (GRLA) provisions.

Module 6: Practical Repo Workshop

  • A practical workshop on repo operational and documentation practices that can be specifically tailored to reflect the client's training needs, including topics such as: (1) Case Study: a run through of practical GRMA modifications; (2) the advantages and disadvantages of repo CCP clearing; (3) Haircuts/Margins and Pro-cyclicality; (4) Covered and Uncovered Short Selling; (5) repo collateral and clearing technological service offerings; and (6) Case Study: Clearstream Triparty repo and Global Liquidity Hub).

Module 7: Credit Risk and Collateral Issues affecting Repo Transactions

  • Credit risk, reducing credit exposure, and polices to discourage delivery fails.
  • The 'rehypothecation' and 're-use' of collateral in repo transactions.
  • Liquidity, funding, capital adequacy, leverage and repurchase agreements under the new Basel III global framework.
  • The changing nature of collateral and liquidity management for repo desks under global regulations (Basel III, Dodd-Frank, The Volcker Rule, EMIR).

Module 8: Repo Operational Practices

  • Mitigating repo risk (counterparty financial strength criteria, collateral optimization, delivery-versus-payment (DVP) settlement) and Dealer's Bankruptcy.
  • Collateral types (Asset-backed securities (ABS); Bank loans; Corporate bonds; Covered bonds; Equity; Gold; Money market securities (MMS); Mortgage-backed securities (MBS)).
  • Review of the 2011 GMRA Protocol (Revised) provisions.
  • Review of select repo Legal Opinions (2015 GMRA Legal Opinions; Master Repurchase Agreement (MRA) US Netting Opinion, 2015; MRA US Enforceability Opinion, 2013. 



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