Repo Collateral Transfer

Repo collateral transfer is a service provided by Edaa to the holders of securities in which it facilitates transfer of collateral-securities from a seller to a buyer through their respective custodians.

A repo transaction is applicable when a seller has securities at hand and needs liquidity, while the buyer has the liquidity and needs a safe investment channel to make a profit for a specified period of time. Any investor, bank or corporation can approach their custodian to facilitate a repo transaction.

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The repo collateral transfer process:

  • Repo buyer and repo seller agree on terms, including currency, amount, collateral, duration, haircuts, etc.
  • Repo buyer and seller exchange cash and collateral as two independent transactions. Collateral transfer is facilitated through the Edaa system (from seller to buyer), while cash is settled independently of Edaa systems.
  • With the termination of the repo contract, the repo buyer returns the collateral to the repo seller. Collateral transfer is facilitated through the Edaa system (from buyer to seller), while cash is settled independently of Edaa systems.

Benefits:

  • Establishes a safe and secure financing framework where collateral is seamlessly transferred between sellers and buyers, thus reducing associated credit risks.
  • Provides sellers with needed liquidity while ensuring reduced credit exposure for buyers.

Fees

Services Fees (SAR) Frequency
Repo Collateral Transfer (0.5 bps) of repo transaction amount on each participant Minimum of SAR 100 Per Transaction

Frequently Asked Questions

No, this service is optional

Edaa custodian members.

During the lifespan of the repo agreement, all legal rights are transferred from the seller to the buyer.

During the lifespan of the repo agreement, all legal rights are transferred from the seller to the buyer.
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