Question: Which platform was launched by the National Stock Exchange (NSE) recently to facilitate repo on corporate debt securities?
(a) Tri-party repo market
(b) Tri-party bond market
(c) Corporate Bond Market
(d) None of these
Ans: (a)
Related Facts:
- On June 12, 2018, National Stock Exchange of India Ltd (NSE), India’s leading stock exchange announced the launch of its ‘Tri-Party Repo Market’ platform in its Debt Segment to facilitate repo on corporate debt securities.
- Tri-party repo is a type of 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.
- NSE will act as tri-party agent and offer an online web based, anonymous, order matching & multilateral trading platform to facilitate repo transactions.
- NSE would avail the services of National Securities Clearing Corporation Ltd (NSCCL), for performing collateral services viz. collateral valuation, margining, and settlement. Settlement of repo transactions shall be guaranteed by NSCCL.
- This eliminates counter party risk, and would results in higher and wider participation in the corporate bond market.
- To begin with, NSE will offer basket repo for tenor of 1 day to 7 days.
- The basket repos would facilitate borrowing and lending of funds against various baskets of corporate debt securities.
- The baskets will include corporate bonds, certificate of deposits and commercial papers.
- Participants will be able to provide securities forming part of the basket as collateral towards repo.
- The first few members who have participated on the platform are Axis Bank Ltd and ICICI Securities Primary Dealership Ltd.
See also the links below:
https://www.nseindia.com/content/press/PR_cc_12062018.pdf
https://www.business-standard.com/article/markets/nse-launches-tri-party-repo-market-platform-for-corporate-bonds-118061300017_1.html
https://economictimes.indiatimes.com/markets/stocks/news/nse-launches-platform-to-facilitate-repo-in-corporate-debt-securities/articleshow/64560931.cms