Amendment to Principal Terms and Conditions for the Purchase/Sale of Japanese Government Securities with Repurchase Agreements
February 5, 2004
Bank of Japan
Note: STRIKE-tags and U-tags are used to cross out words and draw underlines in this HTML document.
At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided to accept cash as collateral for the purchase/sale of Japanese government securities with repurchase agreements to facilitate the Bank's money market operations (seeAttachmentfor the details of amendment).
Attachment
Amendment to Principal Terms and Conditions for the Purchase/Sale of Japanese Government Securities with Repurchase Agreements
- Paragraph 8. shall be amended as follows.
8. Collateral and Margin Calls
(1) Net exposure
"Net exposure" is the amount by which the amount provided in (a) exceeds the amount provided in (b) on a certain business day, assuming that the securities are resold or repurchased on that day.
(a) Total amount of (i) the amount obtained by multiplying the proceeds that the Bank or counterparties would receive when they resell or repurchase securities by margin ratios, (ii) the market value of the securities that the Bank or counterparties have sold,and (iii) the market value of the securitiesand the amount of cash that the Bank or counterparties have supplied as collateral, and (iv) the amount of interest on cash collateral that the Bank or counterparties would receive .
(b) Total amount of (i) the amount obtained by multiplying the proceeds that the Bank or counterparties would pay when they resell or repurchase securities by margin ratios, (ii) the market value of the securities that the Bank or counterparties have purchased,and (iii) the market value of the securitiesand the amount of cash that have been supplied to the Bank or counterparties as collateral, and (iv) the amount of interest on cash collateral that the Bank or counterparties would pay .
(2) (No change)
(3) (No change)
(4) Categories of collateral
Categories of collateral shall be as follows;
(a) Collateral supplied to the Bank
Japanese government bonds with coupons, discount Japanese government bonds, TBs,and FBsand cash .
(b) Collateral supplied by the Bank
Japanese government bonds with coupons, discount Japanese government bonds, TBs and FBs.
(5) (No change)
(6) Interest on cash collateral
The Bank shall pay interest on cash collateral supplied to the Bank at a rate pursuant to the Bank's relevant rules. When net exposure accrues to the counterparties that have supplied cash collateral, the Bank shall pay interest on the amount obtained by subtracting the amount of net exposure from the amount of cash collateral.
(Supplementary Provision)
These amendments shall become effective on a day designated by the Governor, which shall be no later than April 30, 2004.
