Under the 2000 version of the Global Master Repurchase Agreement (the "GMRA"), a standard form agreement produced by The Bond Market Association and the International Securities Market Association, an Event of Default occurs, and all outstanding transactions under the GMRA are accelerated immediately, upon:

  1.  the occurrence of a default; and
  2. 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 Event of Default, triggering an immediate termination of the outstanding transactions without the need for a notice.

Certain event of default provisions were amended in the 2011 version of the GMRA. Under the revised version, acceleration of all outstanding transactions under the GMRA occurs upon the "Early Termination Date," which date may be designated by the non-defaulting party after an Event of Default (under the 2011 GMRA, an Event of Default is complete after the event itself without the need for a notice). Specifically, if at any time an Event of Default has occurred and is continuing, the non-defaulting party may, by not more than 20 days’ notice to the defaulting party specifying the relevant Event of Default, designate an Early Termination Date in respect of all outstanding transactions. The ability to select an Early Termination Date under the 2011 GMRA gives the non-defaulting party more flexibility regarding the timing of closing out the transactions under the GMRA.

However, under the 2011 GMRA, the parties have an opportunity to elect automatic early termination solely with respect to an act of insolvency comprising "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 this election is made, the Early Termination Date in respect of all outstanding transactions is automatically triggered by the occurrence of such act of insolvency and no notice of an Early Termination Date is required.