Charles Law Expertise

Master Securities Forward Transaction Agreements

The Master Securities Forward Transaction Agreement (the “MSFTA”) is a master agreement enabling the purchase and sale of forward and other delayed delivery securities. The first version of the MSFTA was published by the Securities Industry Financial Market Association (“SIFMA”) in 1996. In 2012, SIFMA, with input from market participants, published a new version of the MSFTA which has supplanted the 1996 agreement. The 2012 version includes mutual margining provisions in the body of the agreement.

With a scheduled compliance date of March 25, 2021 for the FINRA 4210 amendments requiring the posting of margin with respect to certain forward transactions, we expect many MSFTA negotiations in 2020.