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Reverse Repurchase Agreement for Malaysia

Reverse Repurchase Agreement Template for Malaysia

A Malaysian law-governed Reverse Repurchase Agreement is a specialized financial contract used in the Malaysian market, regulated under the oversight of Bank Negara Malaysia. This agreement documents a transaction where one party sells securities to another party with a commitment to repurchase them at a later date for a specified price. The document incorporates specific Malaysian regulatory requirements, including provisions that may accommodate both conventional and Islamic finance principles, and includes detailed mechanisms for transfer, pricing, margin maintenance, and default scenarios in accordance with Malaysian law and market practice.

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What is a Reverse Repurchase Agreement?

This document is essential for parties engaging in repo transactions within the Malaysian financial markets. A Reverse Repurchase Agreement is used when parties wish to enter into a short-term financing arrangement using securities as collateral, with one party selling securities to another and agreeing to repurchase them at a future date. The agreement must comply with Bank Negara Malaysia's guidelines and the Capital Markets and Services Act 2007, and may need to accommodate Islamic finance principles given Malaysia's dual banking system. It includes crucial provisions for pricing, margin maintenance, default scenarios, and settlement procedures, while incorporating specific Malaysian regulatory requirements and market practices. This document is particularly relevant for financial institutions, investment companies, and corporate treasuries operating in Malaysia's repo markets.

What sections should be included in a Reverse Repurchase Agreement?

1. Parties: Identification of the seller and buyer, including registration details and addresses

2. Background: Context of the agreement and relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Repurchase: Core provisions detailing the initial sale and commitment to repurchase

5. Purchase Price and Pricing: Specification of initial purchase price, repurchase price, and pricing calculations

6. Settlement and Payment: Procedures for settlement of transactions and payment mechanisms

7. Transfer of Securities: Procedures and requirements for transferring securities

8. Margin Maintenance: Requirements for maintaining margin and valuation procedures

9. Representations and Warranties: Standard and transaction-specific representations by both parties

10. Events of Default: Definition of default events and consequences

11. Rights on Default: Remedies and procedures following an event of default

12. Set-off Rights: Rights of set-off and netting provisions

13. Tax Provisions: Treatment of taxes and stamp duty

14. Notices: Communication procedures between parties

15. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, etc.

What sections are optional to include in a Reverse Repurchase Agreement?

1. Islamic Finance Compliance: Required when the agreement needs to comply with Shariah principles

2. Income Payments: Required when dealing with securities that may generate income during the repo period

3. Substitution of Securities: Optional provisions allowing for replacement of securities during the repo term

4. Agency Provisions: Required when either party acts as agent for third parties

5. Multi-Branch Provisions: Required for agreements involving multiple branches of the same institution

6. Force Majeure: Optional provisions for extraordinary events affecting performance

7. Electronic Trading: Required when transactions will be executed through electronic platforms

What schedules should be included in a Reverse Repurchase Agreement?

1. Schedule 1 - Form of Confirmation: Standard form for confirming individual transactions

2. Schedule 2 - Eligible Securities: List and specifications of securities eligible for repo transactions

3. Schedule 3 - Margin Ratios: Detailed margin requirements and calculations

4. Schedule 4 - Contact Details: Contact information for notices and operations

5. Schedule 5 - Standard Settlement Instructions: Payment and settlement details for both parties

6. Appendix A - Pricing Calculations: Detailed methodology for calculating prices and rates

7. Appendix B - Forms of Notices: Standard forms for various notices under the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions





















































Clauses




































Relevant Industries

Banking and Financial Services

Investment Management

Securities Trading

Insurance

Islamic Finance

Asset Management

Corporate Treasury

Financial Technology

Government and Public Sector

Capital Markets

Relevant Teams

Treasury

Legal

Compliance

Risk Management

Trading

Operations

Settlement

Islamic Finance

Portfolio Management

Credit Risk

Financial Control

Investment Management

Regulatory Reporting

Deal Administration

Collateral Management

Relevant Roles

Treasury Manager

Financial Controller

Chief Financial Officer

Risk Manager

Compliance Officer

Legal Counsel

Investment Manager

Securities Trader

Portfolio Manager

Operations Manager

Settlement Officer

Islamic Finance Specialist

Repo Desk Manager

Credit Risk Officer

Trading Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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