Securities which can be transacted by REPO are bonds, stocks, CP, CD and MBS, however, transaction with REPO at the KRX market is limited only to some items including bonds as below. The reason is to secure stability of REPO transaction through restriction of the objects to the ones with low risk, abundant liquidity, high degree of dispersion and stable cash flow.
Accordingly, excluded from REPO transaction are such items as redemption-by-installment bond, floating rate note except Korea treasury bond, equity-related bond, mortgage bond, privately-offered bond, subordinate bond, asset-backed bond, etc.
In other words, tradable securities in the KRX REPO market are government bonds (treasury bond, foreign exchange stabilization bond), specific laws bond (monetary stabilization bonds, KDIC bond) and blue-chip company bond (credit rating over AA) that satisfy aforementioned requirements.
- Treasury bonds
- Foreign exchange stabilization bond
① more than KRW200 billion of outstanding par value
② Vanilla bond
|Specific laws bonds||
- Monetary stabilization bonds
- KDIC bonds
- Corporate bonds
- Special bonds
|above ①② + bonds with credit rating over AA|
Most markets of advanced countries generally adopt term REPO which specifies trading period at the contract date of REPO, and most of the period are within 1 month. Term REPO is applied to the KRX REPO market following international tendency and 6 terms (1-day, 2-day, 3-day, 4-day, 7-day , 14-day, 21-day and 30-day), having less than one month trading period with abundant liquidity, 60- day and 90-day REPO are available.
Quotation receiving & trading time at REPO market of the KRX is from 09:00 to 15:00 same as that of KTS for organic link with KTS.
According to the characteristic of REPO trading, repo rate is applied to quotation in the REPO market and the repo rate is quoted in yield terms, to two decimal places. Quotation quantity unit & trading unit are KRW10,000 and KRW5 billion respectively.
Only designated quotations are applicable in the case of REPO selling, while both designated quotations (kind of special collateral quotations) and non-designated quotations (kind of general collateral quotations) are accepted in the case of REPO buying.
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