Active development and new participants: NSSMC summed up the results of the repo-market for six months

The NSSMC has analyzed the operation of the REPO-market in the «REPO with risk control» mode since the launch of the new instrument – in May 2021. Thus, the regulator records the active growth of the average daily number of open contracts and the interest of participants.

Thus, according to the results of the first decade of November 2021, the average daily number of open contracts amounted to 42 agreements totaling about UAH 500 million at interest rates in the range of 8.98% – 9.52%. The sites of stock exchanges display in real time applications from exchange trading systems for the conclusion of REPO agreements for hundreds of millions of hryvnias for a period of seven to 28 days.

Currently, REPO agreements with risk control are concluded with three trade organizers – PFTS, «Ukrainian Exchange» and «Perspektiva». The central counterparty is the Settlement Center, which also performs clearing and settlement under agreements. The peculiarity of the service is that the Settlement Center guarantees under these agreements the fulfillment of obligations to each bona fide participant, or the payment of a fine in the amount covering possible losses from non-fulfillment of the agreement. The subject of REPO agreements is Domestic Bonds denominated in hryvnia or foreign currency. The clearing house maintains the guarantee and blocks it under each obligation of market participants. The latter are Domestic Bonds and cash.

«REPO with risk control is a clear example of a market that is developing quite rapidly. We are convinced that we will continue to see the active involvement of a large number of new participants in it,» said Iraklii Baramiia, Сommissioner.

It will be recalled that a REPO (from the English. Repo – repurchase agreement) is a transaction of purchase and sale of securities with the obligation to resell them (purchase) after a certain period at a predetermined price. Repurchase agreements are most often concluded for the purpose of lending secured by securities. This is a very convenient and cheap way to attract short-term financing or to place temporarily free funds.