Repo transactions

Use the opportunity to receive funding by selling the securities to the bank and repurchasing them later.

Repo is the sale of securities with an agreement to repurchase these securities at a certain date in the future. The repurchase price of securities includes an interest rate for using of the received funds.

Repo transaction allows the client to borrow money against the sold securities while keeping the rights to repurchase these securities.

Advantages

  • Fast and convenient – after the contract is signed, each specific repo transaction application is accepted in the bank, as well as in online banking (arrival at the bank is not necessary) and can be considered within one day
  • Easy – since a nature of the transaction is a sale of securities, submission of additional documents or certificates is not required
  • Transparent – client can monitor the price of security and other parameters during all the repo term and at the end of the term the client repurchases these securities
  • Available – within a repo transaction, the client can purchase the securities to be sold to the bank with partial bank’s financing
  • Low-cost – fee for use of funds included in the repurchase price of securities is competitive compared to other types of financing
  • Right to income – besides the funds received from sale of securities, the client keeps the rights to payments made by security’s issuer such as coupon payments and dividends

Terms

  • Securities – liquid debt instruments (bonds) and investment funds
  • (for repo availability for a specific securities, please apply to the bank)
  • Term –  up to 3 months with a possibility to indirectly prolong the term by conclusion of a new repo transaction for the next term
  • Currencies – EUR, USD, AUD, GBP, CHF, JPY, SEK, NOK, DKK
  • Other terms – please contact the bank regarding repo interest rate, haircut, margin call and stop loss rates

How to start?

  • Sign the contract on opening of financial instruments account
  • Sign the contract on repo transactions
  • Fill in the appropriateness test
  • Purchase / transfer / securities into financial instruments account or transfer the necessary haircut amount if the repo transaction will involve bank’s financing for purchase of the securities
  • Submit an application for the specific repo transaction (apply to the bank’s brokers on the terms before submitting the application)
  • Wait upon receiving repo transaction confirmation from the bank

Please note that:

Repo transactions are associated with a risk for a client to suffer losses and will not be suitable for all investors. In the result of the transaction, the amount of client’s liabilities may exceed the amount of the client’s investments due to client’s obligation to pay the bank the previously agreed repurchase price regardless whether the market value of the securities has decreased or increased. If a client purchases securities with a partial bank’s financing and simultaneously enters into a repo transaction regarding the same securities, the amount of client’s liabilities from this repo transaction may significantly exceed the amount of client’s investments in the securities.

Pricelist