Welcome to the GCF Repo® Service section of the Learning Center!
The GCF Repo® Service enables dealers to trade general collateral repos, based on rate, term, and underlying product, throughout the day without requiring intra-day, trade-for-trade settlement on a Delivery-versus-Payment (DVP) basis. Since 1998, FICC’s GCF Repo Service has seamlessly processed these types of transactions, making FICC the only infrastructure in the U.S. to have battle-tested experience, the proven technology and bandwidth to handle processing of these trades, as evidenced during the Lehman default in 2008.
To participate, dealers must be netting members of FICC’s Government Securities Division (GSD).
Dealers execute GCF Repos through Inter-Dealer Brokers, who are also Members of GSD on an anonymous or “blind” basis. Brokers are then required to submit trade data on GCF Repo transactions to FICC shortly after trade execution. Upon receipt of the data, FICC immediately reports the transaction details to the dealers. The most recent trades and position information are displayed simultaneously. Position information is available both at the individual CUSIP level and at the cumulative, overall level.
When GSD receives the trade data from the locked-in trade source, it becomes the settlement counterparty to each dealer and guarantees settlement of the transactions. GCF Repo transactions are settled on a tri-party basis, which requires dealer participants to have an account with either one or both of the participant clearing banks, BNY Mellon or JP Morgan*.
GCF Repo participants trade in pdf GCF Generic CUSIP numbers (33 KB) throughout the day and then, after the cutoff of trading, GSD conducts an afternoon net exclusively for GCF Repo activity. For each such CUSIP, a Dealer Member is either a net securities borrower (i.e. money lender) or a net securities lender (i.e. money borrower). BNY Mellon and JP Morgan provide the mechanism for allowing a chain of simultaneous collateral and cash movements to occur between GSD and its Dealer Members and also to allow those securities to be available for various purposes, including tri-party processing and bank loans. The service helps foster a highly liquid market for securities financing.
Eligible Collateral Types
Collateral currently accepted for GCF Repos include:
U.S. Treasury Bills, Bonds and Notes,
U.S. Treasury Inflation Protected Securities (TIPS)
Fixed- and adjustable-rate mortgage-backed securities issued by Fannie Mae, Ginnie Mae and Freddie Mac,
Non-mortgage backed securities issued by government-sponsored enterprises, such as the Federal Home Loan Bank, Federal Farm Credit Banks and Federal Home Loan Mortgage Corporation (Freddie Mac), and
STRIPS (STRIPS are U.S. Treasury and agency securities that have had the interest-payment coupons separated or “stripped” from the principal, creating zero-coupon securities and separate payment securities from what was originally a single Treasury bond or note).
To learn more, check out the video on the GCF Repo Service below.
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*JP Morgan recently announced its plans to exit the government bond clearance business.
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