Since the CMOF is a framework agreement, as noted above, all financial transactions agreed to are considered to be included in the scope of this framework agreement by the corresponding confirmation document (mainly financial derivatives), and the provisions apply to these transactions, without prejudice to the specific conditions that may be included in the transaction confirmations. The CMOF is also a contractual compensation agreement. This means that the parties agree, through this agreement, to create a single legal obligation covering all transactions concluded there which, in the event of an early maturity, allows the parties alone to demand the net balance of the outcome of the settlement of these transactions, calculated in the framework agreement. The Financial Transaction Framework Agreement (CMOF) is a contractual agreement that is mainly used as a framework agreement for derivative financial transactions between Spanish counterparties. The CMOF was created to replicate other international framework agreements for contractual compensation in the Spanish domestic market. There are three versions of the CMOF: 1997, 2009 and 2013. The first version of the CMOF, which dates from 1997, was developed by the Spanish Banking Association (AEB), although the versions were developed jointly by the AEB and Ceca in 2009 and 2013. The CMOF, in all its versions, includes the “body of the agreement”, which includes the mechanism of the agreement and which is supplemented by several annexes: (i) Annex I, the purpose of which is the modification of this “treaty body”; (ii) Appendix II, which contains definitions of the terms used in the framework agreement; (iii) Schedule III regarding guarantees that may be linked to transactions that are subject to the framework agreement. (iv) Schedule IV, which arises from the need to authorize a large portion of derivatives transactions, and (v) Appendix V, which refers to the initial guarantee that may apply between certain counterparties.
