Trésorier/Treasurer magazine - N°89 - April/May/June 2015 - (Page 47)

ONLINE WWW VERSION CORPORATE FINANCE 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 A Repolution The New Repurchase Conditions 47

Table des matières de la publication Trésorier/Treasurer magazine - N°89 - April/May/June 2015

Cover
Table of contents
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW ICBC
FOCUS
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?
FORUM
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?
CORPORATE FINANCE
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
NEWS
LIFE BEYOND NUMBERS

Trésorier/Treasurer magazine - N°89 - April/May/June 2015