Currently,
Thailand Securities Depository Co., Ltd. (TSD) has started
the operations of Private Repo / Repurchase Agreement. The
TSD acts as the central unit for the collateral management
to support the Ministry of Finance’s policy in promoting
Private Repo, leading to the development of the secondary
market for debt instruments in the future.
Characteristic of Private Repo
Private Repo is an agreement
between a borrower / seller and a lender / buyer where the
borrower agrees to sell securities to the lender with an
agreement that the borrower will repurchase securities from
the lender in the future for the cash amount of the principal
plus the interest payments according to a time period and
an interest rate agreed between parties in advance. Mostly,
the private repo is a short-term borrowing with securities
as the collateral.
Purchased securities
- At the beginning stage, purchased securities are government
debt instruments in Baht currency such as government bonds,
BOT bonds, Treasury Bills and State Enterprise Bonds of
which the BOT acts as a registrar, etc.
To Apply for the Private Repo Service
- Applicants must be the Depository members.
- Must apply for the Repo service with the TSD
- Must open the Repo Accounts
- Must comply with the TSD rules and procedures
Benefits of the Repo service
- To facilitate the back-office services of the Repo
transactions such as clearing and settlement, collateral
management, monitoring the securities benefits placed
as collateral and reporting, etc.
- To promote the liquidity within the debt instrument
market
- To increase the efficiency in utilizing securities
of the related market participants
- To reduce the overall transaction cost of Repo in the
industry
Scope of the Repo Service
- Matching Orders: After two parties
have agreed to engage in the Private Repo, the TSD will
match orders of these two parties sent to the TSD.
- Clearing and Settlement: The TSD provides
settlement and delivery services where the securities
are pledged as collateral for the first-leg and second
–leg transactions. The securities are transferred to other
accounts via the TSD Scripless system. In case of using
the Delivery Versus Payment (DVP), the payment is settled
via the BOT BAHTNET system, or via Settlement Banks (at
present, Krungthai Bank PLC. is the TSD Settlement Bank),
or both parties could settle for a payment instruction
called Free of Payment (FOP).
- Collateral Management: The TSD provides
services for monitoring and managing the collateral such
as daily Mark-to-Market, margin call, and variation margin.
The TSD is also safeguarding the securities and maintaining
the margin.
- Protecting the corporate action to which the
securities issuers pay the securities holders:
The TSD shall inform the customers regarding the corporate
actions, including protecting the customer’s corporate
actions such as passing the interests to customers.
- Conducting the status report: The
TSD shall prepare the status reports of both parties so
each party realizes his / her own status. The aforementioned
report can be retrieved from the system or generated in
various formats.
- Coordinating with parties in case of default:
In case that one party fails to fulfill the obligation,
the TSD shall coordinate with another party to inform
them of such default where further actions will be processed.
Fees for Repo service
- 0.015% per year of transaction value
- Minimum monthly fee of 1,000 Baht
- Exclude other costs such as BAHTNET fee and Settlement Bank fee
Repo Application Processes
1. Request / Download application
form for Repo services from www. tsd.co.th
1.1
Application for Securities Borrowing and Lending and/or
Repurchase Agreement Service
1.2
Application for Opening Securities Depository Account
1.3
Notification letter indicating Securities Custody Account/
Bank Account Number
for REPO Service
1.4
Notification letter authorizing officers responsible for
using TSD’s Repo system
In
case that the applicants are the BOT BAHTNET members and
have not yet authorized the TSD to execute the transactions
regarding the payment made to and from the BOT, and dealing
with the bank accounts held at the BOT under the linkage
on the securities payment settlement
2. Submit application form
with the following documents.
2.1
A photocopy of the affidavit issued by the Ministry of Commerce
(not more than 3 months)
2.2
A photocopy of the Personal Identification Card of an authorized
person acting on behalf of the depositor
2.3
A photocopy of the Personal Identification Card of an authorized
person
2.4
Revenue stamp (30 Baht per one authorized person)
3. Seek an approval from the
TSD.
4. After the approval, the
TSD will maintain the account number and inform the member
its username and password to access the Repo system.
Diagram of Repo Application processes
If you are interested in the Repo service, you can apply
for this service from the present onwards. For more information,
please contact the TSD. E-mail: 
or the following officers.
1. Khun Pichaya Chomchaiya 02-229-2937
2. Khun Namporn Phiphatmongkolchai 02-229-2941
3. Khun Amnuai Phithakkanchanakun 02-229-2940 |
