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A Repurchase Agreement (REPOis a transaction involving the sale or purchase of eligible Securities with an agreement to repurchase or resell the Securities at a predetermined price and dateSecurities.
A REPO transaction involves the transfer of ownership of the Securities and must be documented in a written agreement. It allows investors to access liquidity from eligible Securities while maintaining flexibility in managing their investment portfolios.
1. Sell Eligible Securities Enter into a transaction to sell eligible Securities under the applicable REPO agreement. 2. Receive Funds Receive funds based on the agreed value of the Securities after applying the relevant haircut or margin requirement. 3. Repurchase at Maturity Repurchase the Securities at the agreed price and settlement date.
REPO transactions involve risks, including market, margin, liquidity, counterparty, legal, operational, and settlement risks.
Do not enter into a REPO transaction unless you understand the transaction structure, transfer of ownership, repurchase obligation, pricing, margin requirements, and associated risks.
