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Repurchase Agreement Transactions

Release Date: 30 Jul 2015

Issuance Date
31 July 2015

Effective Date
31 July 2015

Applicability 
FSA   

Summary 
The policy document on repurchase agreement (repo) transactions aims to -

  • set out the scope of repo transactions that can be conducted by licensed banks and licensed investment banks; and
  • promote sound risk management practices by licensed banks and licensed investment banks particularly credit risk, market risk, counterparty risk and settlement risk for the conduct of repo transactions.

Highlights of the 31 July update

Key changes to policy document on Repurchase Agreement Transactions are as follows:

  • Recognition of securities that meet the investment grade requirements of the policy document under a banking institution’s internal risk rating system as eligible securities. The internal risk rating system used in determining the eligibility of the said securities must fulfil the risk management requirements specified in the policy document;
  • Clarification that the Repo PD is not applicable to repo entered into by overseas branches of banking institutions; and
  • The requirement to adopt the Malaysian Annex to the Global Master Repurchase Agreement for cross-currency repo with Ringgit securities will come into force once Persatuan Pasaran Kewangan Malaysia issues the relevant Annex.

Issuing Department 
Financial Sector Development Department


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