Skip to content

RESERVE BANK OF AUSTRALIA

Overnight Liquidity Facility

This document is intended primarily for Exchange Settlement (ES) account holders that might be required to use the Reserve Bank's overnight repurchase agreement facility. It outlines key issues such as who may use the facility, the types of securities in which the Bank will deal and the trade process itself.

Go To

Eligibility

Access to the facility is available to all ES account holders, unless precluded by special terms and conditions relating to an individual institution's ES account.

back to top

Transaction Type

Subject to agreement by the Bank, eligible ES account holders access liquidity through the facility either by extending the unwind date of an outstanding intra-day repurchase agreement to the next business day or by entering into a new overnight repurchase agreement.

Any such transactions are governed by the terms of The Bond Market Association/International Securities Market Association (TBMA/ISMA) Global Master Repurchase Agreement as amended by the terms set out in the RITS Regulations.

back to top

Hours of Access

Eligible ES account holders may request to undertake an overnight repurchase agreement after 16:30 (Australian Eastern Standard Time and Australian Eastern Daylight-saving Time). Banks that are evening-agreed would not normally request an overnight repurchase agreement until after 18:00 during Australian Eastern Standard Time and 20:00 during Australian Eastern Daylight-saving Time.

back to top

Repo Rate

The Bank provides overnight liquidity through the facility at an interest rate (repo rate) that is fixed at 25 basis points over the current target for the cash rate.

back to top

Eligible Securities and Instruments

Under this facility, eligible ES account holders may sell to the Bank, under repurchase agreement, any debt security that is eligible for the Bank’s open market operations. A list of eligible securities and details of the criteria for eligibility can be found on the Eligible Securities page on this website

back to top

Initial Margin

The Bank requires an initial margin on all repurchase agreements. The initial margin will vary with the type of securities given as collateral as outlined on the margins page.

back to top

Transaction Fees

Extending the term of an outstanding intra-day repurchase agreement overnight does not involve any additional transaction fees. However, the standard transaction fees apply:

  • Austraclear charges a fee of $3.00 plus GST per leg per line of stock for repurchase agreements using RBA Repo.
  • Austraclear charges a fee of $11.00 plus GST per leg per line of stock for repurchase agreements not using RBA repo.
  • Austraclear may charge other fees depending on the method of trade entry. More information on Austraclear fees can be found at the ASX Austraclear website.
  • ES account holders taking out an intra-day repurchase agreement without using RBA Repo are also required to reimburse the Bank for its Austraclear fees ($12.00 per leg per line of stock plus GST). Reimbursement to the Bank will be effected through the unwind consideration (see below).
  • As with all movements across ES accounts, the standard RTGS fee of $0.88 will also apply to the settlement of each leg and will be charged in the normal way.
back to top

Trade Procedures

The following outlines the procedures to follow when using the facility. The procedures vary depending on the way in which the intra-day repurchase agreement was entered into the Austraclear System (which is a function of the type of securities involved in the repurchase agreement).

Intra-day Repurchase agreement using RBA Repo

If the outstanding intra-day repurchase agreement has been taken out using the unilateral repurchase agreement functionality in the Austraclear System (RBA Repo), steps involved in accessing the Overnight Repurchase agreement Facility are as follows:

  • Contact the Domestic Markets Desk to request an extension of the date of the second leg to the next business day.
  • There is no need to adjust trade details. The system will automatically recalculate the unwind consideration to include the repurchase agreement rate of 25 basis points over the target cash rate.

Intra-day Repurchase agreement not using RBA Repo

If the outstanding intra-day repurchase agreement has been taken out using the outright trade functionality, steps involved in accessing the Overnight Repurchase agreement Facility are as follows:

  • Contact the Domestic Markets Desk to request an extension of the date of the second leg to the next business day.
  • Agree new second leg details that will incorporate the repurchase agreement rate of 25 basis points over the target cash rate.

Where the Bank agrees to extend the unwind date to the next business day, the unwind consideration will be calculated as the first leg consideration plus reimbursement of the Bank’s Austraclear fees ($26.40 per line of collateral) plus the interest charge.

Any queries on this matter should be directed to the Bank's Domestic Markets Desk on
+61 2 9551 8321.

back to top