REPO 3.0

The solution to support Financial Institutes for financing and funding activities

REPO 3.0

REPO 3.0 supports financial institutions in financing and funding activities, also facilitating operations deriving from the Custody service offered to institutional customers.

It provides functions for securities lending (borrowing and lending), financing and funding (repo), collateralization and the short selling service.

It punctually monitors risks, encourages the use of tools to increase the profitability of both own and customer portfolios and supports settlement with coverage of short positions.

REPO 3.0 deals with all types of collateral management contracts, applying the ICMA rules, through various specialized components for operations with counterparties, CSDs, ICSDs and customers. The application automates operations to the maximum and is equipped with powerful monitoring and control functions for analysing the position for each customer / counterparty. It is composed of independent modules that offer diversified services on broker and / or customer financial instruments.

A repurchase agreement (repo) is a form of short-term loan for government bond dealers. The retailer sells government bonds to investors, usually on a daily basis, and repurchases them the next day.

For the party that sells security and agrees to buy it back in the future, it is a repo; for the party at the other end of the transaction, by purchasing the guarantee and agreeing to sell in the future, it is a reverse repurchase agreement.

Repos are generally used to increase short-term capital.

The value proposition of CAD IT

The product implements the management of bilateral Repurchase Agreement contracts by extending its functionalities and borrowing some peculiarities from Triparty Repo contracts:

  • use of a wide range of financial instruments, also in baskets or pools, as collateral;
  • separate management of the deal outlined in the contract (cash leg) and the management of the financial instrument basket put up as collateral (collateral leg);
  • management for each financial instrument in the basket put up as guarantee:
  1. haircuts,
  2. administrative events, such as coupons and redemption,
  3. replacement, even partial,
  4. any settlement failures.
  • integrated management of the loan deal with guarantee instruments for accounting, supervisory and regulatory reporting purposes, such as SFTR.