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New Legal Agreement for Outstanding SFTs

New Legal Agreement for Outstanding SFTs


Status: Best Practice Finalised, Last Updated: 26/04/2021

If a firm signs a new GMSLA with their counterparty, which supersedes an existing legal document, how should this be captured in reporting?

Best Practice:
When a new master agreement is signed, all open SFTs should be modified (MODI) to represent the repapering of the legal contract by which they are governed. This excludes any transactions that were fully returned on the date on which the contract was signed and should include all remaining balances after partial returns are applied.

Field 2.03 (Event Date) should equal the date that counterparts bilaterally agree the trade agreement was effective. The GMSLA does not have a specific reference to 'date-signed' and can therefore be on different dates, as counterparties do not usually sign documents together. This may be different with electronically signed documents.

Counterparts should take care to align this practice as, quite often, the annotation of the legal trade agreements to transactions is not prevalent in all trading systems nor attributable to a single SFT.

Field 2.09 (Master Agreement Type) is a mandatory, matching, field but not part of the construct of the UTI Exchange Fields/Minimum Data Provision file, therefore; a timely correspondence of this data is imperative should counterparts wish to match at the TR to avoid requiring back-dated modifications.

Fields 2.10 (Other Master Agreement Type) and 2.11 (Master Agreement Version) are both conditional and non-matching, if applicable.

The end-of-day COLU template message also contains the master agreement fields, therefore these should correlate to reported SFTs. (SFTR-229)


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