The Reserve Bank of India on November 28th, 2019 has published The Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 which shall supersede all other directions issued on the subject and covered by these regulations. The Amendment shall be effective from 28th November 2019.
The Amended direction shall be applicable to repurchase transactions (Repo), undertaken on recognized stock exchanges, electronic trading platforms (ETP) and Over-the-Counter (OTC) and it is not applicable to repo/ reverse repo transactions under the Liquidity Adjustment Facility and the Marginal Standing Facility, which would continue to be regulated as per the existing regulations.
Key Highlights from the Direction:
The Eligible securities for repo under these directions are government securities issued by the Central Government or a State Government, Listed corporate bonds and debentures, Commercial Papers (CPs) and Certificate of Deposits (CDs), Units of Debt ETFs and Any other security of a local authority.
The eligible participants in repo transactions are any regulated entity, any listed or unlisted corporates and any other entity approved by Reserve bank.
All repo transactions, other than those on recognized stock exchanges or on approved electronic trading platforms, that disseminate trade information on the platforms, shall be reported within 15 minutes of the trade. The participants to repo transactions acting under these Directions shall furnish any information or data sought by the Reserve Bank within the period stipulated in the letter/mail issued to the participant to furnish such information or data.
Participants shall enter into standard bilateral master repo agreements as per the documentation finalized by FIMMDA and Repo transactions traded on a multilateral trading platform shall be governed by the rules and regulations of the platform where it is traded.
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