Login Here No one logged in. or   Subscribe today

2.2.4 2011 GMRA with AFMA Annex I

  • Larger Text
  • Smaller Text
  • Print
{
  "moduleName": "contentholder",
  "id": 8616,
  "name": "Page Controls",
  "content": "\r\n
    \r\n \r\n
  • \"Larger
  • \r\n
  • \"Smaller
  • \r\n
  • \"Print\"
  • \r\n
\r\n
\r\n\r\n\r\n
{ {this|json}}
", "pagename": { "moduleName": "pagename", "name": "2.2.4 2011 GMRA with AFMA Annex I" }, "siteurl_11": { "moduleName": "siteurl", "siteUrl": "www.otcguide.com.au" }, "globals": { "get": { "ID": "/master-agreements/2-2-4-2011-gmra-with-afma-annex-i" }, "cookie": { "visitorDeviceClass": "desktop", "ASP.NET_SessionId": "ltks5hbmwzwavxp3woiuieu5", "ANONID_FS975144": "15.10.2018 10:59:11.883", "ANONID975144": "b7c6bf2f-c71e-4067-82e2-4e4da37ae3bd", "VISID975144": "f71326f1-51dd-49c2-8d21-2ebdaf83d259#www.otcguide.com.au#15.10.2018 10:59:11.899" }, "site": { "id": 975144, "name": "OTC Guide", "host": "www.otcguide.com.au", "countryCode": "AU", "language": "EN", "dateNow": "2018-10-15T21:59:11.9464671" }, "visitor": { "deviceClass": "desktop", "ip": "54.224.89.34", "country": "US", "city": "Ashburn", "userAgent": "CCBot/2.0 (https://commoncrawl.org/faq/)", "referrer": "/" }, "cart": { "cartUrl": "/OrderRetrievev2.aspx?CatalogueID=0" }, "user": { "entityId": 0, "firstname": "", "middleName": "", "lastname": "", "fullname": "", "username": "", "email": "", "email2": "", "email3": "", "customerType": {}, "leadSourceType": {}, "industryType": {}, "ratingType": {}, "isWholesaler": false, "isLoggedIn": false } } }

The 2011 GMRA was published in 2011 by the Securities Industry and Financial Markets Association (“SIFMA”) and the International Capital Market Association (“ICMA”) as a revision of the 2000 GMRA. Exhibit 1 to the Guidance Notes to the 2011 GMRA (set out in 2.2.5.25 “2011 GMRA (including Annexes and Guidance Notes)”) provides a summary of the principal changes to the 2000 GMRA which have been made in the 2011 GMRA.

The 2011 GMRA provides market participants with a substantial degree of flexibility in structuring the commercial aspects of both the 2011 GMRA and transactions made under it.

The GMRA sets out the standard terms which can be supplemented by terms agreed by the parties in Annex I. The parties also need to make various elections which are recorded in Annex I.

The form of confirmations is set out in Annex II, which is at the rear of the 2011 GMRA (see 2.2.5.25 “2011 GMRA (including Annexes and Guidance Notes)”).

The Buy/Sell Back Annex to the 2011 GMRA contains the additional terms applicable to buy/sell back transactions.

The Agency Annex to the 2011 GMRA can be included if agency transactions are to be permitted, although participants also should consider whether the Australian industry standard Investment Manager Supplement (see 4.4 “Investment managers”) is more appropriate if they are entering into transactions as agent. However, it is recommended that legal advice be taken if the IMS is to be used.

Guidance Note. A copy of the Guidance Notes for use with the Global Master Repurchase Agreement (2011 Version) may be found with the 2011 GMRA (see 2.2.5.25 “2011 GMRA (included Annexes and Guidance Notes)”). This is a detailed note to assist users in completing the 2011 GMRA. (Australian users should be aware that the Guidance Note was prepared from an English law perspective and therefore not all aspects of it are relevant under Australian law.)

KWM Legal Opinion. KWM has prepared a legal opinion on the 2011 GMRA, which is located at 2.2.5.30 "KWM Opinion on GMRAs governed by Australian Law and AFMA Annexes". That opinion also refers to King & Wood Mallesons’ memorandum dated 19 October 2017 entitled “Close-out netting: Summary of Australian Netting Legislation and Insolvency Proceedings” (set out in [4.3] "Netting"), which summarises the relevant sections of the Payment Systems and Netting Act 1998.

****** 

Commentary on AFMA Annex I to the GMRA


Introduction. AFMA, in association with market participants, has developed a standard Annex I for use with the 2011 GMRA in Australian domestic transactions. The AFMA Annex I to the 2011 GMRA is set out below. Various provisions are commented on in endnotes.
The suggested elections under and amendments to the 2011 GMRA reflect current Australian market practices and the way in which Australian denominated securities are transacted under this Agreement. A number of amendments are required to make NSW law the governing law of the Agreement. Participants should assure themselves that the Annex adequately meets their commercial requirements. Where the footnotes make comparisons between provisions of the 2011 GMRA and the provisions of an ISDA Master Agreement, the relevant ISDA Master Agreement is the 2002 ISDA Master Agreement, not the 1992 ISDA Master Agreement.

KWM Legal Opinion. KWM has prepared a legal opinion on the AFMA Annex 1 to the 2011 GMRA, which is located at [2.2.5.30] "KWM Opinion on GMRAs governed by Australian Law and AFMA Annexes". That opinion also refers to King & Wood Mallesons’ memorandum dated 19 October 2017 entitled “Close-out netting: Summary of Australian Netting Legislation and Insolvency Proceedings” (set out in [4.3] "Netting"), which summarises the relevant sections of the Payment Systems and Netting Act 1998.

******

It is expected that users of this Annex will produce this Annex I on their word processor and simply attach it to a photocopy of the 2011 GMRA.

The following links provide the AFMA Annex I Terms and Conditions without endnotes in downloadable form -


 

 

ANNEX I

Supplemental Terms or Conditions

Paragraph references are to paragraphs in the Agreement.

1. The following elections shall apply:

Applicability

(a) [[i]] Paragraph 1(c)(i):

Buy/Sell Back Transactions may be effected under this Agreement, and accordingly the Buy/Sell Back Annex shall apply.

 

(b) [[ii]] Paragraph 1(c)(ii):

Transactions in Net Paying Securities [may] / [may not*] be effected under this Agreement, and accordingly the following provisions [shall] / [shall not*] apply.

 

[(i)         The phrase “other than equities and Net Paying Securities” shall be replaced by the phrase “other than equities”.

 

(ii)         In the Buy/Sell Back Annex the following words shall be added to the end of the definition of the expression “IR”:  “and for the avoidance of doubt the reference to the amount of Income for these purposes shall be to an amount paid without withholding or deduction for or on account of taxes or duties notwithstanding that a payment of such Income made in certain circumstances may be subject to such a withholding or deduction”.]*

Definitions

 

(c) [[iii]] Paragraph  2(b):

Agency Transactions [may/may not] be effected under this Agreement, and accordingly the Agency Annex [shall/shall not] apply.

(d) [[iv]] Paragraph 2(e):

The Base Currency shall be:

(i)           for the purpose of paragraph 10, where the relevant Event of Default is the event set out in paragraph 10(a)(vi) and an amount is due and payable by the Defaulting Party to the non-Defaulting Party in accordance with paragraph 10(d)(ii), the currency of the jurisdiction in which the Defaulting Party is incorporated;

(ii)             in all other cases, Australian Dollars.

 

(e) [[v]] Paragraph 2(p):

For the purpose of paragraph 2(p) Designated Offices are as follows:

Party A: [insert] office.

Party B: [insert] office. 

(f) [[vi]] Paragraph 2(ee):

The pricing source for calculation of the Market Value shall be the relevant page of Bloomberg or, if that page is not published for the relevant day, any other pricing source as reasonably agreed between the parties.

[(g) [[vii]] Paragraph 2(ss)

Where an amount in one currency is to be converted into a second currency on any date, unless the parties otherwise agree, the spot rate of exchange quoted by the foreign exchange agent (selected in good faith by the party obliged to make the conversion) for the sale by it of such second currency against a purchase by it of such first currency will be the Spot Rate and Paragraph 2(ss) is amended accordingly].

(h) [[viii]] Paragraph 2(xx):

Transaction Exposure method [A] / [B].

 

Initiation; Confirmation; Termination

 

(i) [[ix]] Paragraph 3(b):

Both Seller and Buyer to deliver Confirmation.

 

Margin Maintenance

 

 

(j) [[x]] Paragraph 4(f):

Interest rate on Cash Margin to be the Cash Rate. Simple interest to be accumulated daily and payable as agreed between the parties or, failing agreement, monthly.

 

(k) [[xi]] Paragraph 4(g):

Delivery period for margin calls to be:

(i)            if a margin call is made on or before 11.00am [Sydney] time on a Business Day, on that Business Day; or

(ii)           if a margin call is made after 11.00am [Sydney] time on a Business Day, on the next Business Day.

 

Payment and Transfer

 

 

[(l) [[xii]] Paragraph 6(j):

Paragraph 6(j) shall apply.]

 

Contractual Currency

 

 

[(m) [[xiii]] Paragraph 10(a)(ii):

Paragraph 10(a)(ii) shall apply.]

 






 

Notices and Other Communications

 

 

 (n) Paragraph 14:

For the purposes of paragraph 14 of this Agreement:

 

(i)                 Address for notices and other communications for
Party A:

            Any notice in respect of paragraph 10 must be directed to Party A’s [head office] office as follows.  A copy of any notice in respect of paragraph 10 and any other notice or communication to Party A in respect of a particular Transaction should be directed to the contact details reflected in the Confirmation for notices for that Transaction or in the absence of specific notice details in the Confirmation should be directed to Party A’s [head office] Office:

 

Address:

Attention:

Telephone:

Facsimile:

Electronic Messaging System: Answerback:

Other:

 

Address for notices or communications to Party A relating  to Margin Transfer:

Address:

Attention:

Telephone:

Facsimile:

Electronic Messaging System: [email address]





2. [[xiv]] The Agreement is amended as follows:

(a) [[xv]] Paragraph 2(a)(vii):

Insert “or equivalent Australian legislation” after “1986”.

(b) [[xvi]] Paragraph 2(c):

Replace sub-paragraph 2(c)(i) with:

(i)                 for the purposes of paragraph 10, interest shall be charged at a rate per annum equal to the cost of funding the relevant amount (as determined by the party who is owed the payment) plus 1% per annum;

Insert a new sub-paragraph 2(c)(iii) as follows:

(iii)             for any other purpose, the Cash Rate;


 

(c) [[xvii]] Paragraph 2(ha):

Insert a new paragraph 2(ha) as follows:

“Cash Rate”, the interbank overnight cash rate calculated by the Reserve Bank of Australia, as displayed on Reuters Screen RBA30 or any other widely published electronic page. If no such rate is available from Reuters Screen RBA30 or any other widely published electronic page, the rate shall be another rate reasonably agreed between the parties except that if the parties cannot agree, the rate shall be equal to the best bid rate reasonably obtainable by [Party A] in the market for overnight unsecured Australian dollar cash deposits in the relevant currency (as certified by [Party A] such certificate to be conclusive in the absence of manifest error)”.

 

(d) [[xviii]]  Paragraph 2(kk):

 

Replace with “on a 360 day basis, 365 day basis or other day basis in accordance with the applicable market convention, unless otherwise agreed between the parties for the Transaction” with “on a 365 day basis”.

(e) [[xix]]  Paragraph 2(z):

 

Replace paragraph 2(z) with:

“Income”, with respect to any Securities at any time, all interest, dividends or other distributions thereon, including distributions which are a payment or repayment of principal in respect of the relevant securities under an agreed amortising schedule (“Distributions”). For the avoidance of doubt, this excludes distributions which are a payment or repayment of principal in respect of the relevant securities that are not on an agreed amortising schedule.

(f) [[xx]] Paragraph 3(b):

After “(Confirmation”).”, insert “Confirmations may be in writing or sent by electronic messaging system or other means agreed between the parties.”

 

(g) [[xxi]] Paragraph 3(e):

Insert “A demand for Termination must be given no later than 11.00am [Sydney] time on a Business Day if Termination is to occur on that Business Day” at the end of the paragraph.

[(h) [[xxii]Paragraph 6(h):

Replace “shall be combined in a single calculation of a net sum” with “may be combined, if agreed by the parties, in a single calculation of a net sum”.]

[(i) [[xxiii]] Paragraph 6(i):

Replace “shall be combined in a single calculation of a net quantity of Securities” with “may be combined, if agreed by the parties, in a single calculation of a net quantity of Securities”.]

(j) [[xxiv]] Paragraph 12:

Replace “on a 360 day basis or 365 day basis in accordance with the applicable market convention” with “on a 365 day basis”.

(k) [[xxv]] Paragraph 17:

Replace “England” with “New South Wales”, and “English courts” with “the courts of New South Wales”.

 

(l) Paragraph 19:

Replace “England” with “New South Wales”.

 

[(m) [[xxvi]] Agency Annex, paragraph 1(d):

Delete.]

 

[(n) [[xxvii]] Agency Annex, paragraph 4(b)(ii):

Replace:

(i)         the words “Great Britain” with “New South Wales”;

(ii)        the word “England” with “New South Wales”;

(iii)       the words “the United Kingdom” with “New South Wales”.]

 

3. The following supplemental terms and conditions shall apply to all Transactions:

(a) [[xxviii]         The parties agree that this Agreement shall apply to all transactions entered into between the parties prior to the date of this Agreement and outstanding as at the date of this Agreement having the characteristics of a Repurchase Transaction or Buy/Sell Back Transaction, and whether or not entered into under the terms of a master agreement, so that such transactions shall be treated as if they had been entered into under this Agreement.  The terms of such transactions are amended accordingly with effect from the date of this Agreement.

[(b) [[xxix]]          Negative rate transactions.  In the case of Transactions in which the Pricing Rate will be negative, the parties agree that if Seller fails to deliver the Purchased Securities on the Purchase Date then -

(i)          Buyer may by notice to Seller terminate the Transaction (and may continue to do so for every day that Seller fails to deliver the Purchased Securities); and

(ii)         for every day that Seller fails to deliver the Purchased Securities the Pricing Rate shall be zero.]

(c) [[xxx]] Except for the purpose of Paragraph 10 of this Agreement neither party may require (i) the repricing of a Transaction under paragraph 4(k), or (ii) a Margin Transfer to it under paragraph 4(a), or (iii) an adjustment of Transactions under paragraph 4(l), or (iv) a combination of sub-paragraph (ii) and (iii), if its Net Exposure in respect of the other party is less than A$[          ] or its equivalent in any other currency or currencies.

(d) [[xxxi]]           If there is any inconsistency between the terms of this Annex and the terms of the printed form Global Master Repurchase Agreement (2011 Version), then the terms of this Annex prevail.

(e) [[xxxii]]          For the purposes of paragraph 4(h):

(i)            when seeking to return a Cash Equivalent Amount, the Transferor must provide evidence to the reasonable satisfaction of the other party that such failure to transfer Equivalent Margin Securities was due to a problem beyond the control of the Transferor unrelated to the Transferor’s financial position (including, without limitation, a general unavailability in the market of the relevant securities required to be delivered); and

(ii)           if the Transferor pays a Cash Equivalent Amount to the other party, the amount payable shall be increased by an additional 1% per annum.

(f)          For the purposes of the delivery of any notices under paragraph 10, delivery by Electronic Messaging System shall not be an effective method of delivery.

(g) [[xxxiii]]          Consideration of FATCA. Consideration of whether provision needs to be made to deal with any withholding or deduction pursuant to or on account of FATCA.

(h)         Rounding of Cash Margin or Margin Transfer.  For the sole purposes of delivery of Cash Margin, Margin Transfer may be rounded up or down to the nearest multiple of [AUD $10,000] as agreed between the parties from time to time.

(k)         Headings.  The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.

(l) [[xxxiv]]             Amendment or overriding of previous agreements.



Notes

[[i]]    This election allows the parties to elect whether Buy/Sell Back transactions may be entered into under the GMRA and, if so, that the Buy/Sell Back Annex will apply. If Buy/Sell Back transactions may be entered into, then a Buy/Sell Back Annex in the form of the Global Master Repurchase Agreement (2011 Version) Buy/Sell Back Annex should be attached to the 2011 GMRA.

[[ii]]   This election allows the parties to elect whether Net Paying Securities transactions may be entered into under the GMRA, in which event certain amendments are made to the GMRA and the Buy/Sell Back Annex.  Should parties wish to allow transactions in respect of Net Paying Securities they should strike out the words “may not” and “shall not”. Parties proposing to use the Agreement with net paying securities, including net paying margin securities, should first investigate and satisfy themselves as to the suitability of the Agreement in the context of the transactions proposed to be entered into by them as well as to any further or other amendments that they should include.

[[iii]] This election allows parties to elect whether Agency transactions may be entered into under the GMRA and, if so, that the Agency Annex will apply. If Agency transactions may be entered into, then an Agency Annex in the form of the Global Master Repurchase Agreement (2011 Version) Agency Annex could be attached to the 2011 GMRA.  Paragraph 2(n) of this Annex should be inserted if multiple principal transactions are not to be allowed. Paragraph 2(o) of this Annex contains amendments to the Agency Annex consequent on the 2011 GMRA being governed by the laws of New South Wales.

Care!  If multiple principal transactions are to be allowed, consideration should be given to using the Investment Manager Supplement (see 4.4 “Investment managers”) instead of the Agency Annex.

[[iv]] The Base Currency is defined to be Australian dollars. The exception in sub-paragraph 1(d)(i) covers the currency of payments by the Defaulting Party to the non-Defaulting Party when Acts of Insolvency occur with respect to the Defaulting Party. In this event, the currency of the payment is that of the jurisdiction in which the Defaulting Party is incorporated. In some insolvency jurisdictions it is believed this can facilitate payment from an insolvent Defaulting Party. If the Base Currency is not defined as Australian dollars the definition of Spot Rate needs to be consider if the default party is offshore. In all other cases of default, the Base Currency will be Australian dollars. Sub-paragraph (i) will be of relevance only to transactions involving offshore counterparties.

[[v]]   This paragraph enables parties to enter into transactions only through branches or offices in jurisdictions in respect of which they have obtained legal opinions as to the efficacy of the netting provisions of the 2011 GMRA. If parties do not wish to restrict the offices through which repos can be transacted, then the option of “any office” should be included.

[[vi]] This paragraph defines the pricing source for the calculation of Market Value as the relevant page of Bloomberg or, failing that, as reasonably agreed between the parties.

[[vii]]      This is an optional selection where parties do not want to reference the London inter-bank market, such as where time zone differences make this inconvenient.

[[viii]]     Unlike the 2000 GMRA, the 2011 GMRA gives parties a choice of two methods for calculating Transaction Exposure, as summarised below.  The parties specify in this paragraph whether Transaction Exposure method (A) or (B) applies, if they wish it to apply in respect of all transactions under their 2011 GMRA. 

(a)        Transaction Exposure method (A) – Initial margin method

This method reflects the method of calculation used under the 2000 GMRA, where exposure is equal to:

(Repurchase Price x Margin Ratio) – Market Value of Equivalent Securities

In the case of this method (A), the Transaction Exposure is capped at the Repurchase Price.

 

 

(b)        Transaction Exposure method (B) – Haircut method

Under this new method of calculation, Transaction Exposure is calculated as (in summary):

Repurchase Price – Adjusted Value of Equivalent Securities

The ‘Adjusted Value of Equivalent Securities’ is defined as the Market Value of Equivalent Securities discounted by the relevant haircut percentage.

[[ix]]  This specifies that both Buyer and Seller must deliver Confirmations.

[[x]]   This paragraph provides that the interest rate on Cash Margin is the Cash Rate.  It also provides a method to determine the interest rate on the Cash Margin, being simple interest calculated daily. The date for the payment of interest is to be as agreed between the parties or, should the parties be unable to agree, monthly.

[[xi]]  This paragraph provides for the delivery period for margin calls with a distinction drawn between margin calls made before and after 11.00am.

4(g), should only be included if one party is unable to agree to Margin Calls for operational limitation reasons.

[[xii]] This paragraph enables the parties to elect whether or not to apply Paragraph 6(j), which provides that each obligation of a party under the Agreement is subject to a condition precedent that no Event of Default has occurred and is continuing with respect to the other party.  This is not exactly the same approach as that taken in the 2002 ISDA Master Agreement.  The reasons for this include that the Events of Default in each of the 2002 ISDA Master Agreement and the 2011 GMRA are different. Also, Section 2(a)(iii)(1) of the ISDA Master Agreement applies to both Events of Default and Potential Events of Default.  The 2011 GMRA provision applies only to Events of Default. However, the 2002 ISDA Master Agreement deals with different types of products to the 2011 GMRA and there is no legal requirement that the same approach be used if a party has both a 2002 ISDA Master Agreement and a 2011 GMRA with a counterparty (although it may be useful from an operational perspective). 

[[xiii]]     Paragraph 10(a)(ii) provides that an event of default occurs if the Seller fails to deliver Purchased Securities on the Purchase Date or the Buyer fails to deliver Equivalent Securities on the Repurchase Date, in either case within the standard settlement time for delivery of the Securities concerned. Paragraph 10(a)(ii) applies only if the parties agree in Annex I that it applies.

[[xiv]]     These sub-paragraphs set out a number of amendments to the 2011 GMRA, some being consequent on the 2011 GMRA being used in an Australian context.

[[xv]] This amendment is included to clarify that Australian insolvency legislation is intended to apply.

[[xvi]] This amendment provides that the “Applicable Rate” is, for any purpose other than paragraph 10, the Cash Rate, which is more relevant to Australian transactions.

[[xvii]]    This paragraph defines “Cash Rate”. Participants are reminded that using this definition of Cash Rate requires the agreement of the parties as to which will be the designated party.

[[xviii]]   This amendment applies a “365 day basis” for the Price Differential, in accordance with Australian market practice.

[[xix]]     This amendment clarifies the point that payments of principal are not included in “Income” payments unless agreed in an amortising schedule.

[[xx]] This amendment allows the parties to use other agreed methods of Confirmations, such as electronic messaging system.

[[xxi]] This amendment clarifies the procedure for Termination demands.

[[xxii]] Optional selection to paragraphs 2(h) and (i) amend the payments netting and securities netting provisions so that they operate only if the parties agree.

[[xxiii]] See footnote on Paragraph 2(h).

[[xxiv]] This amendment applies a “365 day basis” for the calculation of interest under paragraph 12 of the 2011 GMRA, in accordance with Australian market practice.

[[xxv]] This paragraph alters the governing law of the Agreement to that of New South Wales.

[[xxvi]] See footnote [3] on Paragraph 1(c).

[[xxvii]] See footnote [3] on Paragraph 1(c).

[[xxviii]] Prior transactions.  This provides that previous transactions that are outstanding between the parties with the characteristics of a sale and reciprocal purchase are deemed to have been entered into under the terms and conditions of the 2011 GMRA. Should the parties want to exclude a particular Transaction or group of Transactions from the operation of this provision, then it is suggested that the following additional wording be used: ”The following Transactions are excluded from the application of this provision and are not governed by the terms of this Agreement: [describe transactions, eg by deal number]”.

[[xxix]] Negative rate transactions.  The 1995 GMRA and 2000 GMRA did not provide expressly for transactions with a negative Pricing Rate.  Under the GMRA, if the Pricing Rate is or becomes negative, this may imply that the Buyer will pay to the Seller the absolute value of that negative rate. This leaves a potential risk that, if the Seller fails to deliver the Purchased Securities, the Buyer will nevertheless arguably be required to pay repo interest on the Purchase Price. 

This paragraph provides that, in the case of transactions in which the Pricing Rate will be negative, the parties agree that if the Seller fails to deliver the Purchased Securities on the Purchase Date, then the Buyer can terminate the transaction and for every day that the Seller fails to deliver the Purchased Securities the Pricing Rate will be zero.

[[xxx]] Repricing threshold. This clause allows the parties to specify that neither party may require the repricing of a transaction or a Margin Transfer if its Net Exposure in respect of the other party is less than a specified amount. The parties must agree on an actual dollar amount to include in the clause.

[[xxxi]] Inconsistency. An interpretation provision.

[[xxxii]] If parties require a contractual obligation for the other party to provide evidence of its authority to execute the Agreement then a clause of the following nature can be added:

“On its execution of this Agreement, each party agrees to deliver evidence of its authority to execute this Agreement to the other.”

[[xxxiii]] Consideration of FATCA. The Foreign Account Tax Compliance Act (FATCA) was enacted by the United States of America as part of the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010 (P.L. 111-147). FATCA creates information reporting and withholding regime for payments made to certain foreign financial institutions and other foreign entities. FATCA is far reaching and can impact any person, US or foreign, to the extent that such person is involved in making or receiving payments that fall within the scope of FATCA. Because FATCA directly affects not only US withholding agents and US multinational companies but also foreign financial institutions and other foreign entities consideration should be given to whether the parties need to incorporate a provision to deal with any withholding or deduction pursuant to or on account of FATCA.

[[xxxiv]] Previous ISDA Agreement. If parties want to agree to amend any previously entered ISDA Master Agreement by deleting the September 1992 Australian Addendum No. 9 to ensure that there is no confusion about which master agreement governs, this clause should be inserted:

“If the parties have previously entered into an ISDA Master Agreement (published by International Swaps and Derivatives Association Inc.) with each other, that Agreement is amended by the deletion of the September 1992 Australian Addendum No. 9 - Reciprocal Purchase Agreements, if that addendum forms part of that Agreement and, despite anything in that Agreement, nothing in that Agreement means that a particular Transaction is governed by that Master Agreement rather than this Agreement.”

The clause also provides that where an earlier Agreement specifically states that a particular Transaction is governed by that Agreement, then the parties agree that the Transaction in question is now governed by this Agreement.

Where the parties have previously entered into the AFMA published “Reciprocal Purchase Agreements Memorandum of Agreed Terms and Conditions” and want it to be overridden by the new 2011 GMRA, a similar clause should be inserted to ensure that the 2011 GMRA governs all Transactions between the parties.


 



Last Update Date 30 Oct 2017