Ghana secures ICMA legal opinion for Global Master Repurchase Agreement
By Isaac AIDOO, Accra
The International Capital Market Association (ICMA) has announced the publication of a new Global Master Repurchase Agreement (GMRA) legal opinion for Ghana.
This makes Ghana the third country in Africa, after Mauritius and South Africa, to achieve the significant milestone.
The GMRA is a standardized document used globally to govern repurchase (repo) transactions, where securities are sold and later repurchased at a higher price. Repo transactions are essential for maintaining liquidity in financial markets, enabling institutions to manage short-term funding needs efficiently.
Following requests from members, including the Ghana Stock Exchange (GSE), which operates the Ghana Fixed Income Market (GFIM), ICMA commissioned a legal opinion for Ghana. The legal opinion covers the enforceability of the netting provisions of the GMRA and its validity under Ghanaian law. The opinion provides a clear legal basis to enforce the GMRA and its netting provisions, which is expected to boost market confidence.
It offers assurance to counterparties that their transactions are protected under Ghanaian law, thereby promoting stability and reliability in the financial markets.
In her remarks, the Managing Director of GSE, Ms Abena Amoah, emphasized the significance of the development: “this legal opinion asserts that the GMRA, in its entirety, is valid and legally binding under the laws of Ghana. The validation is crucial for both local and international participants engaging in repurchase (repo) transactions in Ghana.”
The GMRA is recognized as the standard document for repo transactions globally, facilitating efficient and secure trading practices. By securing this legal opinion, Ghana underscores its commitment to aligning with international best practices and regulatory standards. This move is seen as a crucial step in rebuilding the GFIM secondary market, boosting investor confidence, and further integrating Ghana’s financial market into the global financial system.This development also reflects Ghana’s broader efforts to enhance its financial infrastructure, attract international investments, and position itself as a key player in the African financial landscape.
