Repo Collateral Transfer
Repo collateral transfer Service is an optional service provided by Edaa through its members to arrange for repurchase agreements, where Edaa system facilitates the transfer of collateral from seller to buyer based on the repo agreement. The service is provided to accommodate market needs to establish a safe and secure financing framework where collateral is seamlessly transferred between sellers and buyers reducing associated credit risks.
A repo transaction is applicable when a seller has securities at hand and needs liquidity, while the buyer has the liquidity and needs a safe investment channel to make profit for a specified period of time.
Both seller and buyer have to agree on the below:
- Repo buyer and repo seller agree on the repo terms such as currency, amount, collateral, duration, haircuts, repo term etc.
- Repo buyer and seller exchange cash and collateral as two independent transactions. Collateral transfer is facilitated through Edaa system (from seller to buyer), cash is settled independent of Edaa systems.
- With the termination of repo contract, repo buyer returns the collateral to repo seller. Collateral transfer is facilitated through Edaa system (from buyer to seller), cash is settled independent of Edaa systems.
Please refer to Repo Collateral Transfer Service Frequently Asked Questions page.