Overnight Repo Operations: Terms and Conditions

Read the terms and conditions of the Overnight Repo Operations.

Operation details

  • Overnight repos are offered to eligible counterparties at the Bank of Canada’s discretion to reinforce the target for the overnight rate. Offerings by the Bank of Canada are subject to limits for each eligible counterparty, as well as an aggregate limit per offering.
  • Tender date, amount, rate, and other information will be announced in the Bank of Canada Auction System (BCAS) ahead of each operation.

Type of operation

  • Uniform price auction for a fixed Canadian dollar (CAD) amount.

Eligible counterparties

  • Canadian Primary Dealers in Government of Canada securities. The Bank of Canada has sole discretion to remove a Primary Dealer from the list of approved eligible counterparties for a repo transaction, cap or limit a counterparty’s awards in a particular auction or otherwise cease to enter into a repo transaction with such counterparty for any reason.

Term

  • Transactions are for a term of one business day.

Tender process

  • Overnight repo operations will be conducted on an ad-hoc basis when broad overnight general collateral funding conditions warrant a liquidity injection, normally at 11:45 (Ottawa time) with a deadline of 12:00 for participants to submit tenders. The Bank of Canada reserves the right to conduct these operations earlier or later in the day with an approximate 15-minute tender submission deadline to be set by the Bank of Canada and reserves the right to conduct multiple operations in a given day, if necessary.
  • Tenders must specify a bid rate and an amount on a cash-value basis. Each counterparty can submit a maximum of two tenders.
  • The minimum bid rate on cash for the Overnight Repo operation is equal to the Bank of Canada target for the overnight rate. Bid rate must be submitted on a yield basis, up to two decimal places.
  • Tender amounts are subject to a maximum allocation. The minimum tender amount is $1 million, with minimum increments of $1 million.
  • Tenders must be submitted in the Bank of Canada Auction System.
  • The Bank of Canada reserves the right to accept or reject any or all offers in part, including, without limitation, the right to accept less than the total amount specified ahead of the operation.

Allocation mechanism

  • Tenders with the highest bid rate will be accepted and allocated first. Tenders with successively lower bid rates will continue to be accepted until the total amount of cash to be provided by the Bank of Canada reaches the amount on offer and the auction is completely allocated. The lowest accepted bid rate is the allocation rate, which is the rate applied to all accepted tenders. If the sum of tender amounts at the allocation rate exceeds the amount available to allocate, these tenders will be allocated on a pro-rated basis and rounded to the nearest $1 million.

Maximum allocation

  • Winning participants will be awarded an amount of each offering up to the limit of $1 billion per dealer.
  • The maximum cash-value amount of Overnight Repo that will be auctioned per offering is $5 billion.

Timing of results

  • Counterparties will be able to access their confirmations in the Bank of Canada Auction System. The Bank of Canada will email the counterparty confirmations, setting out the specific terms of the transaction.
  • The total cash provided by the Bank of Canada through Overnight Repos as well as the allocation rate, will be announced on the Bank of Canada's website and in the Bank of Canada Auction System as soon as possible following the auction. The securities bought in transactions will also be reflected on the Bank of Canada’s balance sheet.

Eligible securities

  • Directly issued Government of Canada marketable securities denominated in Canadian dollars are eligible for these transactions and must not mature on the date of maturity of the Overnight Repo operation.

Notification of securities to be used

  • Counterparties must notify the Bank of Canada of the securities that will be used following the bid amount being accepted within 15 minutes of the release of the results. The number of securities to be used as collateral is limited to a maximum of 5 ISINs.

Margins

  • Eligible securities are subject to the same margin requirements as those applicable in the Standing Liquidity Facility (See Margin Requirements).

Interest Calculation

  • Interest on the funds will be calculated on an actual/365-day basis.

Coupon Payments

  • All coupon payments received by the Bank of Canada on the securities during the term of the transaction will be kept by the Bank of Canada. The final settlement amount will be adjusted, as required, to account for these receipts in accordance with the Bank of Canada's Master Repurchase Agreement.

Counterparty Settlement Instructions

  • Securities shall be delivered to the Bank of Canada by 16:00 (Ottawa time) through CDSX on T+0 same day settlement of the offering, on a delivery of securities versus payment of funds basis. Securities to be delivered shall be confirmed between the Bank of Canada and the eligible counterparty and priced by the Bank of Canada after the offer and prior to delivery.
  • Bank of Canada CDS settlement CUID is BOCB.

Legal Arrangements

  • Eligible counterparties must have made the appropriate legal arrangements with the Bank of Canada.
  • The Bank of Canada reserves the right to change the terms of subsequent Overnight Repo operations by posting a revised version of these Terms and Conditions.
  • Each tender shall be unconditional and irrevocable after the submission deadline.
  • The Bank of Canada may, in addition to and without prejudice to any rights under the Bank of Canada’s Master Repurchase Agreement, sanction a Primary Dealer if the Bank of Canada is of the view that the Dealer breached any of the terms, including, failing to return the securities on the maturity date. The sanctions that the Bank of Canada may impose include, without limitation, suspending the Primary Dealer from participating in one or more future auctions and changing, on a temporary basis, the bidding limit applicable to the Dealer.