Reverse Repurchase Agreement Template for England and Wales

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Key Requirements PROMPT example:

Reverse Repurchase Agreement

"Need a Reverse Repurchase Agreement for a transaction between our bank and a hedge fund, involving UK government bonds with a six-month term starting March 2025, with weekly margin calls and specific provisions for early termination."

Document background
The Reverse Repurchase Agreement is a crucial instrument in financial markets, particularly for liquidity management and secured lending. Under English and Welsh law, this agreement type provides a legally robust framework for short-term financing arrangements where securities serve as collateral. It specifies terms for the initial purchase, subsequent repurchase, margin maintenance, and default scenarios. The document incorporates regulatory requirements from UK financial services legislation and is commonly used by financial institutions, asset managers, and corporate treasuries for cash management and short-term investment purposes.
Suggested Sections

1. Parties: Identification and details of the counterparties to the agreement

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Purchase and Sale: Core transaction terms including purchase price, securities details

5. Repurchase: Terms of the repurchase transaction including pricing and timing

6. Margin Maintenance: Provisions for margin calls and transfers

7. Income Payments: Treatment of income on purchased securities

8. Events of Default: Definition and consequences of default events

9. Close-out and Netting: Procedures for termination and settlement

Optional Sections

1. Buy-in: Provisions for failing to deliver securities - used when dealing with securities that may have delivery risks

2. Agency Provisions: Specific terms for agency transactions - used when one party acts as agent

3. Additional Representations: Party-specific representations and warranties - used when dealing with specific jurisdictions or entity types

Suggested Schedules

1. Form of Confirmation: Template for transaction confirmations

2. Eligible Securities: List of acceptable securities for the transactions

3. Margin Percentages: Agreed haircuts and margin requirements

4. Agency Terms: Detailed agency provisions if applicable

5. Jurisdictional Requirements: Specific requirements for relevant jurisdictions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Financial Services and Markets Act 2000 (FSMA): Primary legislation governing financial services regulation in the UK, establishing regulatory framework and authorities

Financial Collateral Arrangements (No. 2) Regulations 2003: Regulations governing financial collateral arrangements and close-out netting provisions in financial transactions

Companies Act 2006: Primary legislation governing company law in the UK, relevant for corporate entities entering into repo agreements

Insolvency Act 1986: Legislation governing insolvency proceedings and creditor rights, crucial for default scenarios in repo agreements

UK EMIR (European Market Infrastructure Regulation): Retained EU law governing derivatives and reporting requirements for financial transactions

Financial Services Act 2021: Updates to financial services regulation post-Brexit, including amendments to existing regulatory framework

UK MiFID regulations: Retained EU regulations governing financial instruments and trading, including transparency and reporting requirements

UK Market Abuse Regulation (MAR): Regulations preventing market abuse and maintaining market integrity in financial transactions

Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016: Specific regulations implementing market abuse provisions and penalties

Uncertificated Securities Regulations 2001: Regulations governing electronic securities trading and settlement systems

Law of Property Act 1925: Fundamental property law legislation relevant for security interests and title transfer

Sale of Goods Act 1979: Legislation governing sale of goods, potentially relevant for securities transactions

Financial Markets and Insolvency Regulations 1996: Regulations protecting settlement finality and collateral arrangements in financial markets

Money Laundering Regulations 2017: Anti-money laundering requirements for financial transactions and business relationships

Proceeds of Crime Act 2002: Legislation dealing with money laundering and proceeds of crime, including reporting obligations

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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