16.07.2021 17:08

MOEX records first GCC-repo trades with precious metals used as collateral

On 15 July 2021, Asian-Pacific Bank (APB) and RT-Finance executed the first GCC-repo transactions using precious metals as collateral.

The amount of transaction was in excess of RUB 200 million. APB is a participant in the GCC-repo market, while RT-Finance is a participant in the CCP-cleared deposit market.

Beginning 28 June 2021, precious metals (gold and silver) are eligible as collateral under CCP-cleared repo transactions in a separate asset pool (GC Metal). Participants in the GCC-repo market, corporate clients and participants in CCP-cleared deposit market, including the Federal Treasury, one of the major liquidity provides, will be eligible to place cash collateralized by GCC.
Sergey Titov, MOEX Money Market Department Director, said:

"GCC-repo is among the most sought-after instruments in the Russian money market, with an impressive share of the CCP-cleared repo segment. Five pools with diverse assets that can be posted as collateral under repo transactions are available for participants at present. Today, using precious metals as collateral for GCC-repo, participants can manage their liquidity more efficiently and refinance comfortably at market money market rates."

Artem Evstratov, Precious Metals Department Director at Asian-Pacific Bank, said:

"For us, as an active player in the MOEX swap market, this new opportunity will increase the volume of precious metal transactions, because now it is not only financial institutions that have access to GCC-repo, but also companies among precious metals businesses. As a major player in the precious metals market, we will be adding considerable liquidity to the instrument and will be actively quoting for both fund-raising and placing."

Anna Orlenko, CEO of RT-Finance, said:

"As a pool leader for Rostec, RT-Finance looks forward to using instruments available on the MOEX Money Market. They offer corporate clients more opportunities to place funds with good profit margins and low credit risk that the central counterparty accepts. We appreciate that MOEX is developing new financial instruments to provide corporate clients with more tools to better manage their liquidity."

The Money Market is one of the most important segments of the Russian financial market, a venue for market participants to manage their cash liquidity. GCCs are non-issue securities offered by the National Clearing Centre (NCC) in exchange for assets posted by a clearing member to the asset pool. Assets available for the pool include cash funds (EUR, USD, RUB), bonds and equities accepted by NCC as collateral. The following five pools are available to participants: all bonds (GC Bonds), equities (GC Shares), government bonds (GC OFZ), precious metals (GC Metal), and all securities eligible for repo with the CCP (GC Expanded). The volume of trades on the Money Market grew by 23% in 2020, reaching over RUR 426 trln. The CCP-cleared repo segment reached RUB 243.8 trln (+21%) while GCC-repo volumes increased 38.9% to RUB 75 trln.

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