Repo

The most important type of transaction between banks and the Swiss National Bank (SNB) is the repo transaction (repurchase agreement). The SNB buys securities from a commercial bank and on purchasing them, agrees that the bank will repurchase the securities later on. This enables the bank to receive liquidity from the SNB. The SNB demands interest on this loan, which is known as repo interest. SIX SIS Ltd, as the sole provider of this service for Switzerland, provides an optimal platform for this type of transaction. SIX SIS Ltd offers the automated settlement of repo transactions as a matter of course.

As repos are traded and settled via the proven Swiss Value Chain (Eurex Repo – SIX SIS – SNB), straight through processing is guaranteed. Settlement is effected on a trade-by-trade basis and is irrevocable.

With general collateral repos, the transaction is driven by the money side; the security to be transferred as collateral is of secondary importance.

Multi-currency repo:
In addition to CHF repo transactions, it is also possible to carry out repo transactions in EUR, GBP and USD.

With special repos, the key driver is rather the lending or borrowing of a specific security. Cover for the loaned security is provided in the form of cash.

Collateral
For the term of a repo transaction, SIX SIS Ltd provides comprehensive and fully automated risk management. All outstanding debts and liabilities are assessed several times a day. We offset any net exposures by automatically carrying out a margin transfer. This provides a maximum level of security.

Automation
In principle, you may use all securities deposited with SIX SIS Ltd for repo trading. We also offer a general collateral selection mechanism (GCselect), through which the system can identify and automatically assign as repo collateral securities of a specified quality that have been released for repo trading.

What is more, SIX SIS Ltd has scored a global first by extending the GCselect mechanism beyond bonds to include shares as well. As a result, equity repos can now also be settled automatically. Settlement has never been as safe and easy as today.