Under the Global Master Repurchase Agreement (the "GMRA"), a standard form agreement produced by The Bond Market Association and the International Securities Market Association, all of the events of default (with one exception) require both (i) the occurrence of an event and (ii) service by the non-defaulting party of a default notice on the defaulting party. The only exception is where an act of insolvency comprises "the presentation of a petition for winding-up or any analogous proceeding or the appointment of a liquidator or analogous officer of the Defaulting Party." If an act of insolvency falls within these parameters, it constitutes an immediate and complete event of default under the GMRA without the need for service of a notice declaring it an event of default.

On November 1, 2012, U.K. High Court Justice David Richards determined that the appointment of administrators under the U.K.’s new special administration regime created by the Investment Bank Special Administration Regulations 2011 (the "Regulations") is not analogous to the appointment of a liquidator for purposes of the GMRA. Similarly, an application under the Regulations for a special administration order is not analogous to a petition for a winding-up for purposes of the GMRA. Consequently, according to the U.K. High Court, neither an application under the Regulations for a special administration order nor the appointment of administrators under the Regulations constitutes an immediate and complete event of default under the GMRA. Because these are acts of insolvency not within the sole exception to the notice rule, the non-defaulting party must serve a notice of default on the defaulting party before it may exercise any remedies.

In so holding, the Court reasoned that the exception to providing a notice of default applies only to those instances where the sole purpose of the proceeding is the liquidation of assets and their distribution amongst creditors. If the rescue of the company as a going concern is at least one of the purposes or objectives of the proceeding or appointment, as is the case in special administration proceedings and the appointment of administrators, the exception does not apply and a default notice must be served before there is an event of default under the GMRA. This decision is significant in that the GMRA is governed by English law and the parties thereto irrevocably submit to the jurisdiction of the English courts, regardless of their domicile.