Master Agreements are standard documents intended to cover both domestic and cross-border transactions between counterparties. These Agreements play a key role in safeguarding the interests of financial institutions especially when dealing in transactions involving repos, swaps and certain other financial instruments.

Master Agreements provide a set of common terms for the underlying transactions and set out procedures. They seek to reduce credit risk through the application of contractual termination clauses and methods of payment netting and, in the case of default, close-out netting and liquidation of transactions. Broad contractual relationships between the parties are set out in the general provisions, special provisions and annexes. Accordingly it is essential that the parties to such Master Agreements are fully aware of the legal implications and the extent to which the provisions of the Master Agreements are enforceable within their legislative systems.

The Malta Bankers' Association, in collaboration with the Central Bank of Malta, has commissioned legal opinions on the enforceability under Maltese legislation of three major international master agreements, namely:

• the European Master Agreement (EMA) sponsored by the European Banking Federation (FBE) in cooperation with the European Savings Banks Group and the European Association of Cooperative Banks - EMA Legal Opinion (by G&A)

• the ISDA Master Agreement sponsored by the International Swaps and Derivatives Association (ISDA), Inc - ISDA Legal Opinion (by G&A), and

• the TBMA/ISMA Global Master Repurchase Agreement (GMRA) sponsored by The Bond Market Association (TBMA) jointly with the International Securities Market Association (ISMA) - GMRA Legal Opinion (by G&A).