Trésorier/Treasurer magazine - N°89 - April/May/June 2015 - (Page 47)
What distinguishes the CRCs from
other master agreements and what
were the drivers?
One of the concerns most commonly
raised by parties interested in using
repurchasing transactions as a secure
cash management tool is the anticipated
time to negotiate and agree on a repo
master agreement. This often depends on
the willingness of the parties to deviate
from their own template schedules or
amendments, which is in particular
difficult when the parties are unfamiliar
with the law applicable to the repurchase agreement. It also depends on the
flexibility the parties expect from the
repurchase agreement. Agreeing a master
repurchase agreement can take months
or, in extreme cases, even years.
The CRCs take a different approach.
Amendments or supplements to the CRCs
are not foreseen and they are intended to
apply to all subscribers in their published
form. Repo parties who have signed up to
the CRCs are therefore able to trade with
other subscribers under identical terms
without being obliged to negotiate and
sign a separate master repurchase agreement with each counterparty. The repo
parties under the CRCs merely have to
agree to the basic terms of the individual
trade such as the purchase date and price,
its termination, eligible currencies and
assets as well as the pricing rate.
Legally speaking, this concept does not
change the contractual relationship
between the repo parties and the bank.
By confirming a trade under the CRCs,
a bilateral relationship will be created
between the repo parties. The ICSD itself
is not a party to the CRCs but will only act
as a collateral agent under our Collateral
Management Services Agreement (CMSA)
entered into between the respective
repo parties, just like our ICSD would in
relation to any other bilateral repurchase
agreement. Once interested repo parties
have agreed to the terms of the CRCs, this
innovative contractual setup will effectively reduce the lead time before being
able to trade.
What are the terms of the CRCs?
The scope of the CRCs is limited to plain
vanilla repurchase transactions using our
ICSD as a collateral agent. The terms of
the CRCs are therefore mainly driven by
the requirements and provisions of our
collateral management services provided
under the CMSA. Given their structure,
the CRCs are not designed nor intended
LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°89 - APR
In April 2013, Clearstream's International Central Securities Depository (ICSD),
Clearstream Banking S.A, published the Clearstream Repurchase Conditions
(CRCs), a new master agreement governed by Luxembourg law which can be
used by customers to document a series of repurchase transactions with the
ICSD as the collateral agent. Ralph Beyer, Legal Counsel Custody & Settlement
at Clearstream explains the features of this new master contract.
/ MAY / JUN 2015
Table des matières de la publication Trésorier/Treasurer magazine - N°89 - April/May/June 2015
Table of contents
FINANCIAL HIGHLIGHTS Luxembourg Tax News
Treasurers' kitchen nightmare
FATCA the next hassle for corporate treasurers?
Treasury is becoming much more...
One year on - EMIRage or EMIRate?
Making the most of trade reporting data
EMIR, where do we stand?
Surety bonds - gaining acceptance globally as performance security
The colour of money
Money Market Funds - adapting to a challenging landscape
Comment offrir un meilleur rendement monétaire dans un univers de taux bas?
A repolution - The new Repurchase Conditions
Finding a technology partner in a world of change
Raising your Cyber Security level with Cyber Threat Intelligence
15 MINUTES AVEC CBTI
THE RISK OBSERVATORY
LIFE BEYOND NUMBERS
Trésorier/Treasurer magazine - N°89 - April/May/June 2015