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Its purpose is to help foster a smooth and orderly market in repo in Europe by recommending practices which market experience suggests can help avoid uncertainties or disagreements about transactions, and consequent delays or disruption to repo trading and settlement. The ICMA ERC Guide also codifies market conventions, where this has been thought to be helpful, usually in response to queries from market participants.
The practices set out in the ICMA ERC Guide are general recommendations only. Parties to repos are free to agree other terms, where they see fit. It is not necessarily a problem if recommended best practice is not followed, provided parties recognise the risks to which they may expose themselves as a result. The ICMA ERC Guide has been written to assist staff in member firms of the ICMA ERC, but other firms may find the Guide helpful. It presupposes some knowledge and experience of how the repo market operates.
The ICMA ERC Guide to best practice in the European Repo Market was originally published in March 2014 and that version superseded the previously repo trading practice guidelines that had been published by the ICMA ERC over a decade before. The latest version of the ICMA ERC Guide to best practice in the European Repo Market, published in July 2015, is effective as dated.