1. Introduction
In order to develop the corporate bond market and to bring liquidity RBI vide circular no
FMRD.DIRD. 03/14.03.002/2014-15 dated February 3, 2015 had permitted repo in bonds issued by multilateral financial institutions
On August 10, 2017 RBI vide circular no
FMRD.DIRD.3/CGM (TRS) - 2017 issued tri-party repo directions allowing recognized stock exchanges and clearing corporations of stock exchanges or clearing corporations authorized under PSS Act.to act as tri-party agent.
Repo - It is a
money market instrument, which enables collateralized short term borrowing and lending through sale/purchase operations in debt instruments
Tri-Party Repo – It is a repo contract where a third entity (apart from the borrower and lender), called a Tri-Party Agent, acts as an intermediary between the two parties to the repo to facilitate services like collateral selection, payment and settlement, custody and management during the life of the transaction
BSE after the approval from RBI and SEBI has launched Corporate Debt Repo from 28 May, 2018.
There are 2 Models in Corporate debt Repo which BSE Ltd and ICCL (Indian Clearing Corporation Ltd) are jointly going to launch and have got approval from RBI and SEBI
Basket Repo with settlement Guarantee
- Screen Based Anonymous Trading System ( Boltplus on Web )
- Settlement guarantee by ICCL
- Repo Sub -Type : Transferable ( T ) and Non-Transferable ( NT)
Special Repo without settlement Guarantee
- Web based Negotiated Platform ( Existing NDS- RST platform)
- Without settlement Guarantee
- Repo Sub-Type : Transferable ( T )
2. Product Details
Product Description for Basket Repo
| Repo Tenor | Up to 10 days |
| Repo Sub-type | Transferable (T): Securities transferred to the Lender |
| Non-transferable (NT): Securities held by Clearing Corporation |
| Settlement Type (Ready leg) | T+0 & T+1 |
| Tick Size |
1 basis point (0.01) |
| Quotation | Repo Rate (% p.a., up to 2 decimal places) |
| Market lot | Transferable repo - 100 |
| Non-transferable repo - 1 |
| Lot size (value) | INR 1 lac |
| Basket description of Corporate Bond securities | 'AAA' rated eligible securities with residual maturity 1 to 5 years |
| 'AAA' rated eligible securities with residual maturity 5 to 10 years |
| 'AAA' rated eligible securities with residual maturity 10 to 20 years |
| Basket description of Certificate of Deposit (CD) | A1+ rated eligible securities with residual maturity 20 days to 360 days |
| Order Type | Limit orders |
| Repo Rate range | 2% to 20% |
| Security Type | CB = Corporate Bond |
| CD = Certificate of Deposit |
| Types of securities allowed in Basket Repo | List of eligible securities will be published on BSE website under section Markets->Debt->Corporate Debt Repo |
| Valuation of Eligible securities | Kindly refer REPOVALUATION_DDMMYY.csv file available in extranet for valuation |
|
Product Description for Special Repo
| Platform | Negotiated web-based platform NDS-RST |
| Repo Tenor | Up to 10 days |
| Repo Sub-type | Transferable (T): Securities transferred to the Lender |
| Settlement Type (Ready leg) | T+0 & T+1 |
| Tick Size | 1 basis point (0.01) |
| Quotation | Repo Rate (% p.a., up to 2 decimal places) |
| Unit of Trading | Value in INR |
| Types of securities allowed in Special Repo | List of eligible securities will be published on BSE website under section Markets->Debt->Corporate Debt Repo |
|
3. List of Eligible Securities
Download List
4. Membership Framework
Basket Repo
Any participant desirous of participating in BSE Tri-party repo will have to take membership of New Debt Segment. Guidelines of membership in New Debt Segment are given in Exchange circular no. 20130531-31 dated May 31, 2013.
All existing members of New Debt Segment will be allowed to participate provided they fall under the eligible participant criteria specified by RBI vide Tri Party Repo directions dated August 10, 2017 and execute Tri-Party Repo agreement with BSE/ICCL.
Special Repo
All eligible participants specified by RBI vide Tri Party Repo directions dated August 10, 2017 can access the platform after executing Tri-Party Repo agreement with BSE/ICCL.
Please note that only one Tri-party repo agreement needs to be executed for accessing Basket and Special Repo platforms. On completion of membership formalities, members shall be provided with login credentials to access Basket Repo and Special Repo platforms.
In case of queries market participants may kindly get in touch with Fixed Income Team as given below-
Eligible Participants
- Any Scheduled Commercial Bank excluding RRBs and LABs
- Any Primary Dealer authorised by the RBI
- Any non-banking financial company registered with the RBI (other than Government companies as defined in sub-section(45) of section 2 of the Companies Act, 2013)
- All-India Financial Institutions, Exim Bank, NABARD, NHB and SIDBI etc.
- India Infrastructure Finance Company Limited(IIFCL)
- Any scheduled urban cooperative bank subject to adherence to conditions prescribed by RBI
- Other regulated entities, subject to regulator's approval viz.,
– Mutual fund registered with SEBI
– Housing finance company registered with National Housing Bank;
– Insurance company registered with the IRDA
- Any other entity like Corporate, Merchant Bankers, Stock Broking Entities etc. as approved by RBI/SEBI from time to time
5. Presentation of Corporate Debt Repo
Click for presentation
6. Relevant Notices
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20180522-38
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20180406-55