MASTERING THE MASTER AGREEMENTS

Course Details

This course can be booked as one or both days. Audience: The course will benefit legal, credit and business teams involved in negotiating, setting credit terms and trading these products. Agenda: Day One: The ISDA® & VM CSA What is an ISDA®, what products it covers, the key benefits that an ISDA® provides for Different types of derivatives: OTC, exchange-traded & centrally-cleared (through a central counterparty) The role of derivatives in hedging risk The documentation structure of an ISDA® The structure of an ISDA® & the netting benefits (settlement netting, close-out netting & set-off) The main events of default & how they trigger The main termination events in an ISDA® The key provisions of an ISDA® including close-out amount, termination currency, set-off, multibranch clauses, regulatory clauses What role collateral plays in derivatives & how a CSA interacts with an ISDA® What is collateral & why is it so important? The regulatory requirements for variation margin for uncleared derivatives under the Financial Markets Act The key provisions of the VM CSA: how to calculate exposure; what collateral is required; thresholds; minimum transfer amounts; independent amounts; delivery amounts, return amounts & valuation percentages Which entities & products are in-scope for VM margin The meaning of covered transactions & which transactions the new VM CSA should cover The various options of how to pay interest The impact of having multiple CSAs, setting-off against other CSAs, netting collateral calls across multiple CSAs Eligible collateral & valuation percentages Minimum transfer amounts & how they are apportioned across multiple CSAs Day Two: The Global Master Repurchase Agreement (GMRA) and the Global Master Securities Lending Agreement (GMSLA) What is a repo: the difference between a classic repo; buy-/sell-back & securities lending transaction Cash flows of a repo trade Why use repo? Legal aspects of a repo Risks & rewards: credit risks involved Margin & margin maintenance Collateral & haircuts: initial margin & haircut approach (& how they relate to transaction exposure) Re-pricing Adjustment Income payments Buy-in, mini close-out & set-off What is securities lending? Risks involved in securities lending Collateral & margin Market value Substitutions Manufactured payments Voting rights & corporate actions Default mechanisms Using the GMSLA in South Africa The terms of the 2016 SASLA Annex Tax implications & STT exemptions Re-characterisation risks