Sullivan Advises ITFA on the Launch of the New ITFA Unfunded Master Risk Participation Agreement

05.09.2019 | Press Release

London – International law firm Sullivan has advised ITFA (the International Trade and Forfaiting Association), on the launch of the new ITFA Unfunded Master Risk Participation Agreement (MRPA) and associated user guidelines, published yesterday, and will be issuing a CRR compliant legal opinion shortly.

The MRPA is for use for unfunded participations in a variety of trade finance transactions and is aimed primarily at the cooperation between banks and insurance companies. Like the BAFT MRPA, it is a two-way agreement, whereby either party can adopt the role of ‘seller’ or ‘participant’.

One of the major additions is the introduction of terms specific to ‘instrument facilities’, which allows the seller to mitigate risks arising out of facilities for the issuance of payment instruments (such as guarantees, bonds and standby letters of credit) and the purchasing of receivables. ITFA has published details on its website for members, along with a mark-up against the standard 2018 BAFT MRPA for comparison and ease of understanding.

ITFA is also providing a Capital Requirements Regulation (CRR) compliance legal opinion on the MRPA, which Sullivan is issuing. This opinion will be available shortly.

The launch of the unfunded MRPA follows an update to the NY MPA published by BAFT in tandem with ITFA in May 2019, which serves as the industry standard for secondary market transactions under New York law, to facilitate the buying and selling of trade finance-related assets globally.

The NY MPA in turn closely followed the revised English law MPA in September 2018, which was published with detailed guidance for users and updated the original BAFT MPA published in 2008 to reflect the ever changing legal, regulatory and market landscapes. The BAFT template MPAs have helped to standardise risk participation documentation for trade finance transactions and continue to assist banks, government bodies and investors in better utilising trade finance assets.

Geoffrey Wynne, head of the Trade & Export Finance Group and Sullivan’s London office, commented: “Following the major updates to the NY and English law BAFT MPAs in 2018/9, this new document will help banks and insurance companies to collaborate and better understand risk mitigation of trade finance assets, whether they are a seller or a participant in the market. Sullivan’s international trade finance team is again delighted to have advised ITFA in this major market development.”

The Sullivan team was led by Trade & Export Finance Partners Geoffrey Wynne and Managing Associate Hannah Fearn in London, with support from a team from across the firm’s London office.

About ZAG / Sullivan
ZAG / Sullivan (Zysman, Aharoni, Gayer & Co.) is an international law firm with offices in Israel, the United States, China, and the United Kingdom. The firm’s attorneys specialize in all disciplines of commercial law for both publicly held and private companies, with particular expertise in high-tech, life sciences, international transactions, and capital markets. ZAG / Sullivan provides result-driven legal and business advice to its clients, addressing all aspects of the clients’ business activities, including penetration into new markets in strategic locations. In recent years, the firm has acted on a majority of the equity and debt financing transactions by Israeli technology companies on the NASDAQ. It has been the firm’s experience that the best results, those that give our clients the competitive advantage they need, are attained by coupling professional experience, global presence, and connections with the investor communities in Israel and abroad.

Adva Herrmann

Recent Activity