Fbf Master Agreement 2013

The failures of major financial institutions during the financial crisis showed that, despite the efficiency and robustness of the whistleblowing process under the FBF Agreement, the 2013 update could introduce some flexibility and clarification. A framework agreement is a set of common conditions agreed in advance by the parties and applicable to all transactions of the same nature between them. For each transaction, the parties only have to define and agree on their specific conditions, i.e. mainly the nature of the transaction (under which the parties presented the framework contract), the financial conditions and, as may be the case, in November 2012, the structured and derivatives team of the Jones Day Paris Office became the advisor to the French Banking Federation, or “FBF”) on its project to update the basic contract for the French non-prescription derivatives market, which it first published in 1994 (the FBF agreement). The amendments introduced by the 2013 FBF Framework Agreement can be divided into two main categories: the ISDA/FOA addition was published in 2013 by ISDA and the Futures and Option Association (now renamed FIA Europe) and is the most widely used model for documenting the relationship between a clearing member and its client for the purpose of clearing OTC derivatives transactions through clearing houses, that use the principal-to-principal model of customer compensation. As part of a consensus on the market and among its members, the FBF has decided to adapt this addition to French legal requirements and the FBF`s environment. A special working group has been set up among FBF members, coordinated by the Jones Day team on derivatives and market infrastructures in Paris. Unlike other contract framework contracts, the FBF agreement does not require the event of default to continue in order for it to form the basis of termination. The occurrence of such an event of delay is sufficient to give the non-defaulting party the right to terminate that right, unless it is presumed that it has waived that right expressly or by continuing to perform the contract.

Links to the 2013 version of the FBF Framework Contract and the above documentation can be found here (English version) or here (French version). Clearing by a CCP. Article 11.13 provides that, where one or more transactions are to be cleared by a CCP in accordance with applicable laws or regulations or an agreement between the parties, those parties agree to the conclusion and execution of appropriate supporting documents in order to pursue and clear the relevant transactions within the applicable time limits. If the transactions could not be settled within the current deadlines, a further change in circumstances (Article 7.2.1.3) allows the parties to terminate those relevant transactions. Payment compensation. Prior to the 2013 update, the parties had to decide whether or not to apply the non-payment provision in Article 5(3). No hierarchy between standard events. The new version clarifies that, where an actual event or a number of circumstances concerning a party are qualified in the context of several latecomer events, the non-defaulting party may decide, at its discretion, on the basis of which the framework contract is to be terminated, and that there should be no prevalence of one of them over the other.

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