ITFA introduces MARA as industry standard framework for open account distribution

ITFA is pleased to offer its members access to an industry framework for open account distribution. The Master Account Receivables Assignment Agreement (MARA) template was developed by HSBC in collaboration with law firm Dentons in London in 2018, and has been in use – with positive market feedback – since then.   

The move towards offering the template to a broader spectrum of market participants marks a significant step towards enhancing efficiency and consistency in the distribution of open account assets.

ITFA now encourages its banking members to adopt the agreement as an industry standard, endorsing it for both receivables finance and supply chain finance transactions.

“The lack of an established framework agreement to date has led to some inconsistencies in the distribution of open account assets, underscoring the need for a standardised solution,” says Paul Coles, ITFA board member and chair of the Market Practice Committee. “By promoting the MARA as the recommended template for participations in these types of transactions, ITFA aims to establish a consistent industry-wide practice. This initiative demonstrates our commitment to fostering industry best practices.”

The MARA, governed by English law and based on the 2018 BAFT Master Participation Agreement, provides a structured framework for the funded distribution of receivables and supply chain finance transactions under an assignment structure.

“Participants receive an equitable assignment – namely, beneficial interest in the receivable without notifying the buyer – upon payment. This assignment can become a legal one in specific circumstances. These provisions ensure a seamless transfer of interests from seller to participant, addressing concerns over counterparty credit risk,” says Ian Clements, partner at Dentons.

HSBC’s utilisation of the template has garnered positive recognition from the industry, including other law firms and peer banks.

“As a two-way agreement with balanced provisions, the MARA has allowed HSBC to participate and distribute a range of trade finance assets, striking a balance between protecting the interests of investors and originators” says Bhriguraj Singh, Chief Product Officer, at HSBC Global Trade & Receivables Finance.

The MARA’s broad benefits encompass reduced legal costs, enhanced efficiency, consistency and streamlined negotiations among banks. It accommodates both committed and uncommitted participations, along with one-off or recurring sell-downs.

ITFA members can download the template and accompanying guidance note here.

Any questions should please be addressed to the ITFA Market Practice Committee:

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