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New Reporting Rule Brings Repo Transactions Out of the Shadows

June 14, 2024 | 1 minutes reading time | By John Hintze

Regulators will see transaction-level data on “non-centrally cleared bilateral” – the last and biggest repurchase-agreement segment where transparency was lacking.

Regulators monitoring financial-stability risks are about to get a clearer view into a crucial but historically opaque segment of the U.S. repurchase-agreement, or repo, market.

A final rule from the Office of Financial Research (OFR), adopted in May and effective July 5, requires daily reporting by brokers and others with large NCCBR (non-centrally cleared bilateral repo) exposures. NCCBR is the biggest of the repo categories – they are labeled as centrally cleared and non-centrally cleared, tri-party, and bilateral – and is “the last segment for which regulators do not have a transaction-level data source,” as explained in the rule filing.

The OFR, a U.S. Treasury Department entity that supports the work of the Treasury-led Financial Stability Oversight Council (both were created by the Dodd-Frank Act of 2010), turned its attention to bilateral repo in 2022. James Martin, currently OFR acting director, noted then that the OFR had addressed another repo gap “in 2019 by collecting data on centrally cleared transactions.”

OFR Acting Director James Martin

The NCCBR notice of proposed rulemaking was issued in January 2023. On May 6...

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Topics: Financial Markets

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