Overnight Reverse Repurchase Agreement Template for Nigeria

The Overnight Reverse Repurchase Agreement is a crucial instrument in Nigeria's money market, providing a secure mechanism for short-term lending between financial institutions. This document is used when parties wish to enter into a repurchase transaction where securities are sold with an agreement to repurchase them the next business day at a predetermined price. The agreement must comply with the Central Bank of Nigeria's regulatory framework and guidelines for repo transactions, including specific requirements for eligible securities, margin maintenance, and settlement procedures. It is particularly relevant for liquidity management, short-term funding needs, and monetary policy operations in the Nigerian financial market. The document includes comprehensive provisions for transfer of securities, pricing mechanisms, default scenarios, and close-out procedures, while ensuring alignment with Nigerian banking and securities laws.

1. Parties: Identification of the Seller and Buyer, including their regulatory status and capacity

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement, including specific repo terminology

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

5. Repurchase Date and Price: Specifics of the repurchase transaction including pricing calculation and settlement timing

6. Transfer of Securities and Payments: Procedures for securities transfer and payment mechanisms

7. Margin Maintenance: Requirements for maintaining margin and handling margin calls

8. Income Payments: Treatment of income on the transferred securities during the repo period

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

10. Close-out and Set-off: Procedures for early termination and settlement

11. Representations and Warranties: Standard and transaction-specific representations by both parties

12. Tax Provisions: Treatment of taxes and tax-related obligations

13. Governing Law and Jurisdiction: Nigerian law as governing law and jurisdiction provisions