German Master Agreement For Financial Derivatives

The third and final section focuses on the provisions relating to EONIA in the Framework Agreement itself, in particular on tailor-made provisions agreed between the Parties, as the main part of the Framework Agreement does not refer to EONIA. The banking association has therefore prepared and organized the publication of a model amendment for the transition from EONIA to €STR. Although it seems complex at first glance, it follows a modular approach and can be adapted to the needs of the parties and their specific agreements by choosing different options. Options that are not chosen by checking the corresponding box simply do not apply. In addition, Section 4 of the Model Agreement provides for an escape clause in respect of euro STR as an alternative benchmark, so as to meet the language of case requirement. The standard contract is designed to cover the DRV (in Part A of the standard contract), the German framework contract for securities lending (in part B) and the German framework contract for repo operations (in part C). For each of these data, the parties can choose, among other things, whether a modified euro str applies or whether they wish to use the daily STR on a daily basis, plus a single compensation. All variants provided for in the standard contract may be subject to the negotiation of tailor-made provisions and other schemes. Options other than the choice of the reference rate itself include provisions relating to the date of change and the exclusion of specific provisions or agreements between the parties. The BSA obliges the parties to agree on a reference rate for the calculation of interest on the guarantees issued. At present, by far the most common reference rate is the euro overnight index Average (EONIA). . .

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