Overnight Reverse Repurchase Agreement Template for Saudi Arabia

The Overnight Reverse Repurchase Agreement is a critical instrument in Saudi Arabia's money market operations, used primarily by banks and financial institutions for short-term liquidity management. This agreement template is designed to comply with Saudi Arabian law and regulations, including the requirements of the Saudi Central Bank (SAMA) and, where applicable, Sharia principles. It details the terms and conditions for the purchase and subsequent resale of securities within a one-business-day timeframe, including pricing mechanisms, transfer of title, margin requirements, and default provisions. The document is particularly relevant for institutions operating in the Saudi Arabian financial market and needs to be customized based on the specific requirements of the transaction and the parties involved. It incorporates market standard provisions while ensuring compliance with local regulatory requirements and market practices.

1. Parties: Identification of the parties entering into the agreement (Buyer and Seller)

2. Background: Context of the agreement and relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement, including Purchase Price, Repurchase Price, Securities, and Income

4. Purchase and Sale: Core transaction terms including the transfer of securities and payment obligations

5. Pricing and Payment Terms: Calculation of purchase price, repurchase price, and pricing rate

6. Transfer of Title and Risk: Provisions regarding ownership transfer and risk allocation

7. Margin Maintenance: Requirements for maintaining value of purchased securities

8. Income Payments: Treatment of income received on purchased securities

9. Representations and Warranties: Standard and Saudi-specific representations including Sharia compliance

10. Events of Default: Definition of default events and consequences

11. Remedies: Available remedies upon occurrence of default

12. Governing Law and Jurisdiction: Saudi law as governing law and jurisdiction provisions

13. Notices: Communication requirements and contact details

14. Counterparts: Execution in multiple counterparts