Repo And Stock Loan Netting Opinion Coverage

The long-awaited discontinuance of netting opinion coverage for the OSLA and 1995 GMRA has been announced by the industry associations, ISLA and ICMA.

The netting opinions issued by these associations from 2019 onwards (opinions usually being issued in April in each year) will cease to include these earlier agreements. In the case of ISLA this means the 1994 OSLA, the 1995 OSLA as well as the 1996 Master Gilt Edged Stock Lending Agreement.

For institutions who report exposures on a net basis under CRR and other regimes following the Basel capital framework, this effectively means those firms will need to up-grade or repaper their client relationships which are still documented under these vintage agreements. This should ideally be completed by April 2019.