A Non-Circumvention, Non-Disclosure Agreement (NCNDA) and an Irrevocable Master Fee Protection Agreement (IMFPA) are standard documents in commodity brokerage that protect the interests of intermediaries and ensure confidentiality between parties.
What Is an NCNDA?
A Non-Circumvention, Non-Disclosure Agreement prevents parties from bypassing intermediaries to deal directly with each other, and protects confidential information shared during negotiations. It ensures that brokers and agents who introduce parties are not cut out of the transaction.
What Is an IMFPA?
An Irrevocable Master Fee Protection Agreement defines the commission or fee structure for intermediaries involved in a transaction. It specifies the percentage, payment mechanism, and timing of fee disbursements, typically paid from the proceeds of the transaction.
Why They Matter
In multi-party commodity transactions, several intermediaries may be involved. The NCNDA and IMFPA ensure that each party’s role is recognized, their relationships are protected, and their compensation is secured. These documents are essential for maintaining trust in the brokerage ecosystem.
Standard Practice
NCNDA and IMFPA documents are typically exchanged alongside or shortly after the LOI/ICPO. They are signed by all parties in the transaction chain, including buyers, sellers, and intermediaries, and are often referenced in the SPA to ensure fee payments are incorporated into the settlement process.