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Repo

A repo is an agreement in which

• the seller of securities agrees to buy them back at a specified time and price
• are mainly used for loans linked to book-entry securities or money

Depending on the repo agreement either money or securities serves as collateral for the loan during the term of the agreement. Repo agreements specify the interest rate through which the lender is remunerated for the transaction.

With the Ramses system repo service, one needs to enter only basic data from the agreement and the system will automatically handle the agreed sale (first leg) and repurchase (second leg). This way the parties of the repo agreement do not need to ensure that both trades are entered into the system at a specified time.

To be able to use the buy-back service, customers must open a derivatives account where agreements will be recorded and a book-entry account for the depositing of the securities subject to the repo agreements.