Repo Clearing Service

Overview

The repurchase agreement (repo) is a short-term secured loan: one party sells securities to another and agrees to repurchase those securities later at a specific price.

The difference between the securities’ initial price and repurchase price is the profit margin paid on the loan, known as the repo rate.

Interbank Repurchase Agreement (Repos) are concluded through bilateral negotiations between buyers and sellers, and reported in Muqassa Portal.

Novation takes place immediately when the trade legs are matched and accepted by the Muqassa. Subsequently, there is no counterparty relationship between the buyer and seller; instead both parties have the Clearinghouse as counterparty.

Benefits and Features

Muqassa allows trades to be netted across all Muqassa members, lowering net settlement exposures.
Bilateral counterparty credit risk is mitigated through novation to Muqassa.
Market risk is mitigated through standardized margin processing.
Forward REPO: Allows participants to submit repo deals which are due to start up to 2 business days in the future.
Reverse REPO: Allows repo deals to be submitted by the buyer and confirmed by the seller, i.e. the lender can initiate the repo.
Opt-out functionality: Allows participants to initiate an automated opt-out request, i.e. cancel existing repo deals via mutual agreement through Muqassa portal.
Roll Over functionality: Allows participants to initiate a rollover request, i.e. extend the repo deal via mutual agreement through Muqassa portal.
Segregated Position Account: Enables segregated position accounts to separate members’ clients’ accounts upon request.
Email Notification: Notifies members for pending counterparty affirmations deals.