ICMA ERCC Guide to Best Practice in the European Repo Market

With the prior approval of the ICMA International Repo and Collateral Council (IRCC) Committee, regional committees may enact trading guidelines or recommendations for their regional councils. Such guidelines or recommendations must be in the overall interest of improving efficiency or liquidity in the relevant market. The following guideline has been adopted with the approval of the IRCC Committee.

The Guide sets out standards for the orderly trading and settlement of repos. Its purpose is to help foster a smooth and orderly market in repo in Europe by recommending practices which market experience suggests can help avoid uncertainties or disagreements about transactions, and consequent delays or disruption to repo trading and settlement. The Guide also codifies market conventions, where this has been thought to be helpful, usually in response to queries from market participants.

The practices set out in the Guide are general recommendations only. Parties to repos are free to agree other terms, where they see fit. It is not necessarily a problem if recommended best practice is not followed, provided parties recognise the risks to which they may expose themselves as a result. The Guide has been written to assist staff in member firms of the ICMA ERCC, but other firms may find the Guide helpful. It presupposes some knowledge and experience of how the repo market operates.

The latest version of the Guide, published in March 2021, is effective as of 30 March 2021.

It is the intention of the ICMA ERCC to continually monitor developments in the European Repo Market. Accordingly, the Guide will continue to remain under review and will be amended as warranted by any evolution in the agreed understanding of best practice. Because of this intention to periodically amend the Guide, the most up-to-date version will be available on the ICMA website for download and print. It will be for repo market participants to ensure that they periodically check the ICMA website to ensure that they have the most up-to-date version of the Guide.

For further information please contact ercc@icmagroup.org.

See also:

Frequently Asked Questions on repo.
ASIFMA-ICMA Guide on Repo in Asia
UK Money Markets Code
Producing guides to best practice in emerging repo markets by Richard Comotto, October 2018

Contacts:

Andy Hill
Senior Director, Market Practice and Regulatory Policy; secretary to the Secondary Market Practices Committee and also responsible for overseeing repo policy.
Direct line: +44 20 7213 0335

Alexander Westphal
Director, Market Practice and Regulatory Policy, secretary to the ICMA European Repo and Collateral Council and Committee (ERCC) and ERCC Operations Group.
Direct line: +44 20 7213 0333