Repo-Reverse Repo Market is one of the leading organized repo markets of the world. With the inception of the operations of the market, a low-risk and low-cost environment was established for repo transactions. Banks can realize repo-reverse repo transactions in this market without having to meet the reserve requirement of the Central Bank.
Securities which are held as collateral in sufficient amounts at the starting value date of the transaction are kept in custody in the name of the party executing the reverse repo until the ending value date of the transaction. A daily re-appraisal is conducted on such securities according to the conditions of the market and if any depreciation is determined, additional collateral is sought. Settlement transactions on the ending value date are realized automatically.
All the above mentioned services are provided by Borsa İstanbul, and such securities are kept in custody by İstanbul Settlement and Custody Bank Inc.
These orders are placed by specifying rate and repo amount in multiples of a certain minimum order size. The non-executed part of the order remains passive in the system.
In this type of orders, a rate is not specified. The order given in multiples of a certain minimum order size is fully or partially matched by passive orders and the non-executed part of the order is cancelled.
The above order types can be given to include the specific conditions defined below:
Immediate or Cancel Order:
It is an active order type subject to the condition of execution in part. As soon as it is entered, this order matches with the outstanding counter-orders, and its non-executed part is automatically cancelled. It may be given in the form of a “Limit Order” or a “Market Order”.
Fill or Kill Order:
It is an active order type subject to the condition of execution in full. If this condition is not met as soon as the order is entered, the order is cancelled. It may be given in the form of a “Limit Order” or a “Market Order”.
Validity Periods of Orders:
Orders are valid for the day on which they are given. All orders with the same value date are cancelled at 14.00 hrs if not executed, and those with a future value date are cancelled at the market closing hour.
Orders may be transmitted with a future starting value date up to 7 days. There is no limitation for the repo ending value date.
In addition to order types described above, trade reporting is available for members that enable them to execute a repo-reverse repo transaction by determining the counterparty of the transaction. Members are able to execute their orders and report them to Borsa İstanbul through trade reports within the price and quantity limits set for that particular instrument by Borsa İstanbul regulations, without transmitting orders in the order book. It is possible to send cleared trade reports, trades which are settled at Takasbank, in Repo Reverse Repo - Normal Market.
Order Matching Rules
On the market, transactions are executed according to “multiple price-continuous auction” method. Accordingly, repo orders are matched with same or lower rate reverse repo orders, whereas reverse repo orders are matched with same or higher rate repo orders.
Orders conveyed to the market are processed as per rate and time priority. Thus the highest rate orders have priority in repo orders whereas the lowest rate orders have priority in reverse repo orders. If orders have the same rate, time priority is applied. Where rate equality does not exist, the rate of the order which had been entered in the system earlier is the trading rate.
Unmatched orders and unexecuted parts of matched orders transmitted to the market can be changed.
While the change in the rate of the order, increase in repo amount and change of account holder of the trade lead to the loss of time priority, the reduction of repo amount and change of a representative reference does not give rise to the loss of time priority.
Unmatched orders and the unexecuted part of matched orders transmitted to the Market can be canceled.
The rate tick applicable to orders conveyed to the market is 0.01%.
Orders are communicated in minimum order size and its multiplies. The minimum and maximum order sizes in effect are as follows:
|Normal Orders Market||Small Orders Market||Trade Reports|
Orders may be transmitted with a future starting value date up to 7 days. Repo end value date can be one year the most.