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{{fullanat|gmra|1(b)|2000}} | {{fullanat|gmra|1(b)|2000}} | ||
There are two types of {{gmraprov|Transaction}} under a {{gmra}}: a {{gmraprov|Repurchase Transaction}} and a {{gmraprov|Buy/Sell Back Transaction}}. | |||
===Difference between {{gmraprov|Repurchase Transaction}} and a {{gmraprov|Buy/Sell Back Transaction}} | |||
According to ICMA’s helpful website<ref>https://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/repo-and-collateral-markets/icma-ercc-publications/frequently-asked-questions-on-repo/8-what-is-the-difference-between-a-repurchase-agreement-and-a-sell-buy-back/</ref> economically, [[repo]]s and [[sell/buy-back]]s both behave like [[secured loan]]s; legally both amount to a sale and later repurchase of securities. A [[repurchase agreement]] is always a written contract; a [[sell/buy-back]] need not be. | |||
*'''Undocumented sell/buy-back]]s''': The sale and repurchase legs of an undocumented sell/buy-back are considered as separate contracts. Since there is no contract between times: | |||
**The parties cannot call margin on each other for market movements between the transactions | |||
**Netting is less certain. | |||
*'''Documented sell/buyback]]s''': There are operational differences between repos and documented sell backs: | |||
**Differences in the margining process | |||
**What happens when income is paid on collateral. | |||
{{ref}} |