ECB allows PSPP securities
05 May 2015 Frankfurt
Image: Shutterstock
The European Central Bank (ECB) has made the holdings of securities purchased under the public sector purchase programme (PSPP) available for securities lending.
The implementation of this activity has been delegated to its existing lending agent Deutsche Bank under the terms and conditions determined by the ECB. The ECB has stated that it may revise these terms and conditions if this is deemed necessary.
Holdings purchased by the ECB under the Securities Markets Programme that are also eligible under the PSPP will be available for lending at the same conditions.
The ECB's securities lending arrangements are designed to allow eligible counterparties, any time, to borrow securities at a fixed fee of 40 basis points. This fee is the difference between the repo and reverse repo rates.
The term is a fixed maturity of one week, and the ECB has offered the possibility of rolling over the transaction on a week-by-week basis for up to three times with the fee increasing by 10 basis points at each time.
According to the ECB, the arrangements are aimed at primary dealers of euro area sovereign bonds and at other institutions with “market making commitments”, provided that they fulfil all the legal requirements for the given securities lending activities.
This involves, in particular, the signing of what the ECB has deemed the “relevant contractual documentation” with the securities lending agent, Deutsche Bank, subject to the approval by the ECB.
The implementation of this activity has been delegated to its existing lending agent Deutsche Bank under the terms and conditions determined by the ECB. The ECB has stated that it may revise these terms and conditions if this is deemed necessary.
Holdings purchased by the ECB under the Securities Markets Programme that are also eligible under the PSPP will be available for lending at the same conditions.
The ECB's securities lending arrangements are designed to allow eligible counterparties, any time, to borrow securities at a fixed fee of 40 basis points. This fee is the difference between the repo and reverse repo rates.
The term is a fixed maturity of one week, and the ECB has offered the possibility of rolling over the transaction on a week-by-week basis for up to three times with the fee increasing by 10 basis points at each time.
According to the ECB, the arrangements are aimed at primary dealers of euro area sovereign bonds and at other institutions with “market making commitments”, provided that they fulfil all the legal requirements for the given securities lending activities.
This involves, in particular, the signing of what the ECB has deemed the “relevant contractual documentation” with the securities lending agent, Deutsche Bank, subject to the approval by the ECB.
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