Revised EFRP/Block Agreements For Review

Comments Due By: COB July 10, 2020

24 June 2020

Following the open comment period at the end of 2019, the FIA Law & Compliance Division’s Give-Up Subcommittee reviewed the comments received and further worked to revise the template EFP Agreements made available on FIA’s website.  The revised templates are now available for final review before they are published on FIA’s website.  Linked on the side of this page, you will find clean versions of the revised agreements, along with redlines, marked against the currently published, 2017 versions.

The Give-Up Subcommittee would like to specifically flag that it is proposing revised Customer and Trader versions, as well as two new Broker versions.  We encourage you to read all four versions in full as there are differences between them.  If you have any final feedback on these draft documents, please email Natalie Tynan by close of business on Friday, July 10, 2020.  In order to provide needed and timely updates to these agreements, we intend to adhere to this deadline. 

Below is a brief, non-exhaustive summary of certain changes made to the agreements, for your reference:

  • EFP references were expanded to contemplate EFRPs, i.e., exchange for physical, exchange for swap, exchange for risk position, exchange of option for option, or any similar bilateral transaction;
  • Block transactions (regardless of whether the position is given-up) are now contemplated by the agreements;
  • Language was added to state:  “The parties agree and acknowledge that any limits established by Customer’s Clearing Broker using risk management functionality provided by any trading facility or exchange shall constitute limits or conditions within the meaning of” the relevant section of the agreement, “irrespective of whether Customer’s Clearing Broker communicates such limits or conditions” to the specified other parties;
  • Language was added regarding Trade Break Transaction Adjustments and Trade Break Settlement Amounts;
  • The two different Broker versions (one where Broker is acting on behalf of Dealer and one where Broker is acting on behalf of Trader) were created to contemplate an additional potential party to a transaction, including, but not limited to, billing procedures associated therewith.  In the Broker (FOR TRADER) version, parties have the option to select the party to be billed, i.e., Customer, Trader on behalf of Customer, or Customer’s Clearing Broker; certain specific language is included where the Customer’s Clearing Broker is selected as the party to be billed.

The Give-Up Subcommittee will consider all final comments and feedback on these draft documents.  The Subcommittee may reach out to you for clarification on your comments and/or feedback.  After considering all timely submissions, the Give-Up Subcommittee will recommend revised language to the Law & Compliance Executive Committee.

FIA will continue to assert copyright over all form agreements that it publishes, including those that incorporate suggestions from industry.

If you have any questions, please contact Natalie Tynan.

  • FIA
  • Law & Compliance