What is a master transaction agreement?

A master transaction agreement is a contractual commitment reached by two parties in a financial negotiation, where all parties agree to the majority of terms that will rule future transactions.

Where have you heard about master transaction agreements?

Often used by financial service institutions, master transaction agreements highlight specific terms such as credit limits, margin requirements and types of transaction that are to be covered. Most master transaction agreements are standardised and bilateral.

What you need to know about master transaction agreement.

Under the master transaction agreement contract, specific transactions can be worked out in seconds as there are precise rules – the traders just need to agree to the quantity price and security. The majority of electronic communications networks and exchanges make it mandatory for their member companies or customers to enter into a trading agreement. This is done in order to set out the rights and obligations of the exchange and the particular customer or company. Each trade is usually a specific, separate contract, with a commitment to distribute cash one way and securities another.