In terms of the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 dated 24th July, 2018 "Tri-party repo" means a repo contract where a third entity (apart from the borrower and lender), called a Tri-Party Agent, acts as an intermediary between the two parties to the repo to facilitate services like collateral selection, payment and settlement, custody and management during the life of the transaction.
Triparty Repo i.e. TREPS facilitates, borrowing and lending of funds, in Triparty Repo arrangement. CCIL would be the Central Counterparty to all trades from Tri Party Repo Dealing System (TREPS) and would also perform the role and responsibilities of Triparty Repo Agent, in terms of Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 as amended from time to time.
All the repo eligible entities are entitled to participate in Triparty Repo. The entity type admitted include, Public Sector Banks, Private Banks, Foreign Banks, Co-operative Banks, Financial Institutions, Insurance Companies, Mutual Funds, Primary Dealers, Bank cum Primary Dealers, NBFCs, Corporates, Provident/ Pension Funds, Payment Banks, Small Finance Banks, etc.
Eligible entities, desirous of participating in Triparty Repo, need to apply for Membership of ‘The Clearing Corporation of India Ltd. (CCIL)’s Securities Segment and Triparty Repo (Dealing) Segment of Clearcorp Dealing Systems (India) Ltd (CCDS). The membership application forms in prescribed format may be submitted separately along with two cheques of Rs 25,000/- each (plus applicable GST) favoring “The Clearing Corporation of India Limited” (CCIL) and “ClearCorp Dealing Systems (India) Limited” (CCDS), towards one time membership fee.
Upon approval of membership, by CCIL and CCDS, the concerned member is required to execute documents like Power of Attorney, mandate, etc. in the prescribed formats and submit the same to CCIL and CCDS. After completion of documentation formalities the member need to deposit minimum prescribed collateral. Thereafter members can undertake Triparty Repo transactions through the Dealing System offered by CCDS which would be settled through CCIL.
Members of INFINET network can access TREPS Dealing system through INFINET while other members can access TREPS Dealing system through Internet. Members accessing the TREPS Dealing System through internet are Associate Members.
Eligible entities, desirous of participating in Triparty Repo, need to apply for Associate Membership of ‘The Clearing Corporation of India Ltd. (CCIL)’s Securities Segment and Triparty Repo (dealing) Segment of Clearcorp Dealing Systems (India) Ltd (CCDS). The membership application forms in prescribed format may be submitted separately along with two cheques of Rs 25,000/- each ( plus applicable GST) favoring “The Clearing Corporation of India Limited” (CCIL) and “ClearCorp Dealing Systems (India) Limited”(CCDS), towards one time membership fee.
Upon approval of membership, by CCIL and CCDS, the concerned associate member is required to execute documents like Power of Attorney, mandate, etc. in the prescribed formats and submit the same to CCIL and CCDS. After completion of documentation formalities the member need to deposit minimum prescribed collateral. Thereafter members can undertake Triparty Repo transactions through the Dealing System offered by CCDS which would be settled through CCIL.
Associate members need to route their membership documentation through a Settlement Bank appointed by CCIL for settlement in Indian Rupees.
An Associate Member is required to maintain an exclusive Current Account for CCIL settlements with any one of the Settlement Banks designated by CCIL. Associate Members can maintain their GILT a/c with the settlement bank or any other CSGL Service provider.
TREPS Dealing System is an anonymous order matching System provided by CCDS to enable Members to borrow and lend funds. It also disseminates online information regarding deals concluded, volumes, rate etc., and such other notifications as relevant to borrowing and lending under Triparty Repo by the members.
Upon completion of documentation formalities and submission of minimum collateral, an Entity shall be provided access to the TREPS Dealing System. An approved entity shall be provided a Member ID, Member Number and two User names which are unique within the member. The Member may request for customized User names and on receiving in appropriate format, the same shall be created by CCDS. The User can access the TREPS Dealing System by logging in with User name (ID) and password communicated to him. The system would, as a part of the password policy implemented by CCDS / CCIL, prompt the user to change the password immediately on his logging in to the system.
Associate members access the TREPS dealing system through Internet, with the help of the Digital Signature Certificate. The Associate Member has to arrange for obtaining such Digital Signature Certificate immediately after completing membership formalities and submit the details it to CCDS for configuration.
Members can access TREPS Dealing System through INFINET connectivity whereas Associate Members can access TREPS Dealing System through internet.
The minimum lot size is the order size quantity, below which system would not accept orders and multiple lot size is the lot size in which the system would accept orders, if the orders are above the minimum lot size. The minimum and multiple lot size for borrowing and lending under Triparty Repo is Rs.5 lakhs.
Single Order Limit is the maximum order size that can be entered by a User within a member.
Currently the borrowing/ lending is facilitated for tenors upto next 7 days and for three months end dates. A member can request for making available of a particular tenor up to a period of 365 days, by requesting in the format available in sub menu of Request forms under TREPS.
The borrowing and/ or lending can be done for settlement type T+0 and T+1.
TREP ID indicates the 2nd leg repayment date of the Tri party Repo trade. e.g. TREP010119 means the trade is due for repayment (2nd leg) on 01st January 2019.
The Trading and Settlement charges payable by member/s for Triparty Repo to CCDS and CCIL respectively, are detailed in notifications issued in this regard.
When a Member logs off from the system, the member is given an option to either cancel all outstanding orders or to retain the orders in the system.
The outstanding orders of the dealer, if any, remains in the order book.
Deal Tickets are automatically generated by the TREPS Dealing system after every trade and a hard copy is printed by the printer configured to the PC.
A member can reprint a deal ticket any number of times by selecting the particular trade in the Previous Trades Query and clicking on PRINT. Members can also generate a summary report of all his trades by loading the Previous Trades Query and clicking PRINT.
CSV stands for Comma Separated Value. A .CSV is generated every time a print command is triggered for a Deal ticket or any report from Dealer Work Station (DWS). A .CSV is generated when a deal ticket is automatically printed on conclusion of a trade. .CSVs is normally stored in the C drive of the PC wherein the DWS is logged in. However, facility is provided on the Dealer Work Station for members to configure the path to any folder in a common drive and once configured, all .CSVs will get stored automatically in the designated folder.
Deals done on TREPS Dealing System cannot be directly uploaded in to the proprietary system of the Member from the database. The .CSVs are provided to Members precisely for this purpose. The .CSVs saved in the Member’s a folder in local or common drive can be utilised by the Member to upload in to their proprietary system through a utility developed at Member end for converting the .CSVs in to formats compatible with the formats in the Member’s proprietary system.
Yes. Members can view their Available Total Limits for the day, i.e., Available Initial Margin and Available Borrowing Limit on the TREPS Dealing System, in the ‘Check Limits’ screen under ‘Basic Data Query’. The member can also view his limit utilization after every trade and the updated status of his balance limit. Also, in case of intra-day deposits and withdrawals of collaterals the trading limits displayed in the screen are updated accordingly.
A member gets deactivated on the TREPS Dealing system automatically when the Initial Margin / Borrowing Limit available for TREPS is fully utilised.
Yes, a member can deposit additional margin intra-day and subsequently place orders further.
Yes. The members can square off their borrowing against lending and vice a versa by an opposite trade in the same TREP id.
The consideration amount for the deal is computed based on the interest rate at which the deal is concluded as per the following formula. 1st leg Consideration amount = 2nd leg consideration/(1+ (interest rate/36500)* tenor in days)
Initial margin constitutes the margin obligation required to be fulfilled by a Member in respect of its each Tri party Repo borrow and / or lend order. Members have to deposit initial margin in the form of cash or securities, in advance, before putting up any borrow and / or lend order. Presently members are required to deposit upfront a minimum cash of Rs.1,00,000 towards Initial Margin. Any additional requirement may be met from surplus available in securities deposited towards Borrowing Limit.
Initial margin is charged at a rate notified to the members from time to time on the 2nd leg consideration of the order in concerned TREP ID. While arriving at the net outstanding for each TREP ID, offset is allowed between Borrow and Lend trades on FIFO basis and if there is any interest loss due to such offset, such loss is recovered as Initial Margin.
Cash contribution towards Triparty Repo collateral shall be reckoned for Initial Margin. Please refer to the collateral work flow process notified for deposit and withdrawal of Cash and Securities towards Triparty Repo Collateral.
Yes. A member has to deposit a minimum cash of Rs.1 lakh towards Initial Margin. Members may over and above the minimum cash, contribute eligible securities towards Borrowing Limit (BL). Once available cash is utilized towards Initial Margin then the available Borrowing Limit shall be reckoned for Initial Margin requirement.
Members are required to deposit a minimum of Rs.1 lakh towards Initial margin. The minimum Initial margin deposit has to be strictly in cash only. Over and above this the Members/Associate members are required to deposit initial margin in advance at the rate notified by CCIL of their traded and outstanding order amount.
Members are entitled to receive interest on eligible cash collateral as provided in Triparty Repo Collateral Chapter of Securities Segment Regulations and at a rate notified by CCIL.
Borrowing limit is a limit given to a member against the value of collateral deposited by them, net of haircut, to enable them to borrow funds using Tri party Repo dealing System.
The eligible securities deposited by a member as collateral towards borrowing limit as Triparty Repo Collateral are subjected to a valuation exercise at the end of each business day. The valuation is carried out using CCIL’s mark-to-mark price for such securities. Aggregate value of securities contributed by a member, net of haircut, rounded downwards to the nearest rupee is set as permissible borrowing limit for such member. Any security deposited during the day as collateral towards borrowing limit is also revalued at last available MTM price of the security and such a value, net of haircut, is made available as Borrowing Limit. Value of any security withdrawn during the day is reduced from the available borrowing limit. Apart from the end of the day valuation, CCIL undertakes such valuation on multiple times during the day also.
CCIL periodically prescribes a list of the securities eligible for contributions as collateral by members.
Borrowing under Tri party Repo results in utilization of borrowing limit. The utilized portion of the borrowing limit of a member at the end of a day would be equal to the aggregate of the outstanding Triparty Repo borrowings by such member. Securities covering the face value of the outstanding Triparty Repo borrowings are debited to the borrower’s gilt account with CCIL and credited to lender’s gilt account with CCIL as per the prescribed settlement process.
Members can transfer securities from their SGL Account to CCIL’s designated CSGL Account using value free transfer functionality on RBI’s eKuber System. Associate members shall arrange to transfer the securities from their CSGL Service provider’s CSGL Account to CCIL’s designated CSGL Account. Upon transfer of securities, members shall inform CCIL using the CCIL eNotice System.
Yes. Members can withdraw the securities deposited but not utilized for borrowing and / or Initial margin. Member can also substitute securities that have been deposited as collateral either intra-day or overnight i.e. for next day value. However, the securities identified for debiting to the member’s GILT account with CCIL towards its borrowing immediately after close of trading session shall not be available for substitution on the same day. (Note: Please refer to ‘Collaterals Work Flow Process’ issued in this regard for detailed procedure.)
No. Securities debited towards Triparty Repo borrowing cannot be withdrawn on T+0 basis by the Member. The T+0 Withdrawal Request for such securities will be rejected by CCIL.
The securities received by the Lender in its Gilt account with CCIL, towards Triparty Repo lending cannot be withdrawn.
The interest on securities shall be paid to the member contributing the securities, irrespective of utilization of such securities towards funds borrowing.
CCIL shall maintain a separate Default Fund viz. TPR-DF for meeting losses arising out of any default by its members from Tri Party Repo trades.
The securities contributed by the members towards Default Fund are valued daily at end of the day. If the value of the securities net of haircuts falls below a threshold level as notified by Clearing Corporation from time to time, members are required to contribute such additional sums to the Default Fund as may be necessary.
For deposit and withdrawal of cash / securities collateral towards Default Fund, members shall be guided by the Collateral Work Process notified and available on CCIL web site.
Mark to Market Margin (MTM) constitutes the margin obligation required to be fulfilled by a member to cover the notional loss in value of its outstanding T+1 trades.
All outstanding T+1 trades of the day are considered for End of the Day MTM margin computation. End of the day MTM rates for various TREP IDs are computed as per process described below. MTM loss on Tri party Repo trades is arrived at after allowing full offset between positions in different TREP IDs. Net loss, if any, is collected as MTM Margin - net MTM gains are ignored. MTM margin applicable on trades is treated as incremental MTM margin payable at EOD debited immediately on assessment of the same at end of the day. In case of a resultant shortfall in margin, Members are required to fund their margin account within stipulated time on the next business day. Failure to do so attract penalty.
CCIL gives primacy to the traded rates. For the TREP IDs traded during a day, weighted average rate of last five trades of the day in the said TREP ID (or of all trades, if number of trades in a TREP ID during the day is less than five) are taken into consideration. Market outliers are ignored for this purpose. In case there is no trade in a TREP ID on a particular day, rate interpolated or extrapolated from trades in TREP IDs of nearby maturities or interest rate in inter-bank market for corresponding tenor is used.
Sudden volatility in interest rates / bond prices during the day may substantially erode the Initial margins / hair cut amount collected from the members. CCIL therefore, everyday at 12.00 noon & 3 PM revalues all outstanding trades of the members as as at the time of computation (including trades outstanding at previous EoD and new trades concluded on the current day) ,using the latest available TREP rates. Collaterals are revalued using the intra-day MTM prices arrived at for computation of intra-day MTM margin in Securities segment. Net MTM loss in the portfolio of a member is computed as sum of net MTM value depletion on outstanding trades and reduction in value of collateral under charge. If the net MTM Loss arrived at as above exceeds a percent (as notified from time to time) of the sum of the haircut value of collateral under charge and the initial margin collected, the difference is collected as intra-day MTM margin.
The eligible securities deposited as collateral with CCIL for availing borrow limits for Triparty Repo Dealing, are subjected to Mark-to-Market valuation intra day and end of day on a daily basis. When the value of the underlying collateral declines on account of mark-to-market valuation such that utilized Borrow Limits exceeds the available Borrow Limit the difference is construed as mark-to-market shortfall which the Member has to immediately replenish.
RBI has made the reserve requirements for Triparty Repo borrowing similar to borrowing in market repo and no CRR is required to be maintained for Triparty Repo borrowings outstanding the books of Member/s. (RBI Notification RBI/2018-19/24 – FMRD.DIRD.01/14.03.038/2018-19 DATED July 24, 2018)
A lender can reckon the securities received by it for Triparty Repo lending for its SLR purposes, provided security is primarily eligible as an SLR security. (RBI Notification RBI/2018-19/24 – FMRD.DIRD.01/14.03.038/2018-19 DATED July 24, 2018)
All Triparty Repo reports pertaining to trading, settlement, collateral and Risk Management are made available through the CCIL Report Browser accessible through INFINET and internet.