8 11 2016 8 14 54 AM

Occasionally, banks or dealers need to reclaim a security that has been sold as part of a term repo. To do this, they substitute something else of equivalent value—usually a similar security—in order to keep the repo agreement itself intact. The substituted security then becomes the collateral for the repo.  

DVP Repo transactions are processed, compared and netted along with other government securities trades each day by the Government Securities Division (GSD) as part of its business of handling all the post-trade processing in the trillion-dollar market for government securities. Included in this repo service is an automated facility that supports the substitution of repo collateral. To make use of the facility, participants must follow an established set of rules governing how substitution information should be communicated to GSD and when substitute collateral must be made available. 

FICC Government Securities Division (GSD) DVP Repo Netting Members involved in direct or brokered trades are eligible to use the DVP Repo Collateral Substitution service. For brokered repo trades, which make up the bulk of repo transactions, the inter-dealer broker who executed the trade is responsible for coordinating the substitution and sending the substitution request to FICC.

To learn more, check out the video on Repo Collateral Substitution Services below. 

To learn how to enter or query Repo Collateral Substitutions in the Real-Time Trade Matching (RTTM®) system check out our DVP RTTM® Simulations menu here.

8 11 2016 8 14 54 AM

Occasionally, banks or dealers need to reclaim a security that has been sold as part of a term repo. To do this, they substitute something else of equivalent value—usually a similar security—in order to keep the repo agreement itself intact. The substituted security then becomes the collateral for the repo.  

DVP Repo transactions are processed, compared and netted along with other government securities trades each day by the Government Securities Division (GSD) as part of its business of handling all the post-trade processing in the trillion-dollar market for government securities. Included in this repo service is an automated facility that supports the substitution of repo collateral. To make use of the facility, participants must follow an established set of rules governing how substitution information should be communicated to GSD and when substitute collateral must be made available. 

FICC Government Securities Division (GSD) DVP Repo Netting Members involved in direct or brokered trades are eligible to use the DVP Repo Collateral Substitution service. For brokered repo trades, which make up the bulk of repo transactions, the inter-dealer broker who executed the trade is responsible for coordinating the substitution and sending the substitution request to FICC.

To learn more, check out the video on Repo Collateral Substitution Services below. 

To learn how to enter or query Repo Collateral Substitutions in the Real-Time Trade Matching (RTTM®) system check out our DVP RTTM® Simulations menu here.

DVP Repo Collateral Subtitution Timeframes

11:00 AM* — deadline for submission of DVP repo collateral substitution notifications, after which a late fee will be imposed. Such notification is not deemed to be submitted until it is received by FICC.

12:00 PM  first deadline for submission of information regarding New Securities Collateral, after which a late fee will be imposed (this deadline will be extended by one hour on days that: (i) the Corporation determines are high volume days. or (ii) The Securities Industry and Financial Markets Association announces in advance will be high volume days). Such information is not deemed to be submitted until it is received by FICC.

12:30 PM — second deadline for submission of information regarding New Securities Collateral. after which such submissions will be processed by the Corporation on a good faith basis only and a late fee imposed (this deadline will be extended by one hour on days that: (i) the Corporation determines are high volume days, or (ii) The Securities Industry and Financial Markets Association announces in advance will be high volume days). Such information is not deemed to be submitted until it is received by FICC.

1:00 PM — final deadline for submission of information regarding New Securities Collateral. after which the Member must resubmit its information for processing by the Corporation during the following business day. (This deadline will be extended by one hour on days that: (i) the Corporation determines are high volume days. or (ii) the Securities Industry and Financial Markets Association announces in advance will be high volume days). Such information is not deemed to be submitted until it is received by FICC.

 

*All times herein are ET.

DVP Repo Collateral Substitution Late Fees

Late Submission of Collateral Substitution Notifications

On any particular Business Day, a Repo Party shall be assessed a late fee of $100 for each DVP repo collateral substitution notification that is received by the Corporation after the deadline for such as stated in the Schedule of Timeframes.

Late Submission of Information Regarding New Securities Collateral

On any particular Business Day, a Repo Party shall be assessed a late fee of(i) $100 for each submission of information regarding New Securities Collateral that is received by the Corporation after the first deadline, but before the second deadline, for such as stated in the Schedule of Timeframes, and (ii) $250 for each submission of information regarding New Securities Collateral that is received and processed by the Corporation after the second deadline for such as stated in the Schedule of Timeframes. Such fees will be assessed with respect to each transaction for which a notification of a DVP repo collateral substitution has been received by FICC. but for which FICC has not received information regarding New Securities Collateral.

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