Bank Negara issues Exposure Draft of Policy Document on Repurchase Agreement Transactions

Bank Negara Malaysia is seeking written feedback on the exposure draft of a policy document, Repurchase Agreement Transactions (‘Proposed Policy Document’) issued on 20 August 2019.
 
The Proposed Policy Document applies to licensed banks and licensed investment banks and will supersede the Policy Document on Repurchase Agreement Transactions (BNM/RH/PD 032-3) issued on 31 July 2015 (‘Existing Policy Document’) when it comes into effect.
 
The main changes that will be introduced under the Proposed Policy Document are as follows –
 
  1. the maximum tenor of a repurchase transaction will be extended from 365 days to five years;
  1. the standard lot for an inter-bank Ringgit repurchase transaction will be increased from RM 1 million to RM 10 million;
  1. the securities that are eligible for a repurchase transaction will be expanded to accord greater flexibility to market participants in their conduct of repurchase transactions by removing section 9 of the Existing Policy Document which sets out the criteria for securities that are eligible for a repurchase transaction; and
  1. the requirement under the Existing Policy Document for a repurchase agreement to be subject to the Malaysian Annex issued by the Persatuan Pasaran Kewangan Malaysia (PKKM) will be removed.
 The deadline for submission of feedback is 13 September 2019.