Japan adds T bills to sec lending facility
01 September 2015 Tokyo
Image: Shutterstock
The Bank of Japan will now include treasury discount bills (T bills) as approved securities to be sold through the Securities Lending Facility, effective from 1 September, following the recent turmoil in Asian markets.
A statement from the central bank suggested the move aims to increase liquidity and ease the recent stress in Japanese government fixed income markets and, “further facilitate the bank's money market operations as well as contributing to smooth settlement of Japanese government securities”.
For the newly added T-bills, the upper limit to the amount of sales per issue will equal either the amount outstanding of the bank’s holding or JPY 100 billion, whichever is smaller.
Counterparties will also be “permitted to consecutively purchase the same issue from the bank for a maximum of five business days”.
However, this rule is not applicable to rollover transactions subject to fails charge in accordance with market practice. The minimum fee rate will be 0.5 percent.
The central bank also stated it may extend the period for consecutive sales transactions per issue when necessary in light of the volatile conditions of financial markets.
A statement from the central bank suggested the move aims to increase liquidity and ease the recent stress in Japanese government fixed income markets and, “further facilitate the bank's money market operations as well as contributing to smooth settlement of Japanese government securities”.
For the newly added T-bills, the upper limit to the amount of sales per issue will equal either the amount outstanding of the bank’s holding or JPY 100 billion, whichever is smaller.
Counterparties will also be “permitted to consecutively purchase the same issue from the bank for a maximum of five business days”.
However, this rule is not applicable to rollover transactions subject to fails charge in accordance with market practice. The minimum fee rate will be 0.5 percent.
The central bank also stated it may extend the period for consecutive sales transactions per issue when necessary in light of the volatile conditions of financial markets.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
