Reed Smith Client Alerts

Key takeaways

  • On 19 August 2024, the International Capital Market Association (ICMA) and the International Securities Lending Association (ISLA) announced the publication of two new Digital Assets Annexes, one to supplement to the 2011 Global Master Repurchase Agreement (GMRA); the other to supplement the 2010 Global Master Securities Lending Agreement (GMSLA). 
  • The annexes were developed by the Digital Assets Legal Working Group run by the ICMA and ISLA.
  • The annexes introduce additional categories of securities, such as Asset-backed Digital Assets and Platform Transferred Securities, which are able to be used as collateral under repurchase or securities lending transactions.
  • The annexes represent an exciting step forward in the evolution of the GMRA and GMSLA.  Their publication supports the continued innovation within the digital asset space and recognises the increasing market appetite for the inclusion of this asset class in traditional finance markets.

Background

The GMRA and GMSLA have long been established as the standard international master agreements used for documenting repurchase transactions and securities lending transactions under English law.

The annexes supplement the GMRA and GMSLA and provide the opportunity for market participants to customize their GMRA and GMSLA transactions to include digital asset collateral under market standardized templates.

The introduction of annexes tailored to digital assets, and the resulting consistency of approach when doing deals relating to such assets, will allow market participants to transact with confidence and certainty. This in turn will provide a stable foundation for the growth of this asset class across the repurchase and securities lending space.

This article explores the key features of the Digital Asset Annex to the GMRA.