Re-rates. As noted above in the variable rate open repo and reverse repo agreements, a rerate is a change in the repurchase rate in a repurchase agreement. In this scenario, the interest begins accruing at one rate and changes to a new rate during a point in the agreement. This type of transaction primarily impacts the Accounting Agent. To facilitate a rerate the initiation must be cancelled using a rerate indicator. This cancellation acts as an amend transaction and the new instruction should also contain the rate indicator as well as the re-rate date and time which should reflect the effective date of the new rate. This will allow for changes to be made to the rate without truly cancelling the instruction since the accrual will need to be kept on the Accounting Agents books. An accrual start and end date will be needed to indicate the start of the new rate and end of the previous rate. Both the cancel and new instruction should contain appropriate linkage back to the initiation message. Note that a separate instruction is needed to change maturity date; only one repo closing scenario business process (e.g., call, rerate, etc.) can be met with a cancellation and new instruction
Re-rates. In a repo rate change operation, the account owner instructs the account servicer to modify the repo rate of a repo. This process may lead to the modification of the repo closing date as well (note: a change to repo closing date would require a separate message). Like for all repo processes described in this document, the repo rate change process is not applicable to all markets. In some markets, such a change is only possible by the closing of the original repo and the opening of a brand new deal. Rerate scenarios require two instructions, the first is a cancellation instruction using :22F::REPT//RATE. The second is a new instruction that will use :22F::REPT//RATE and will have the new rate. The replace instruction will contain the amended rate :92a::REPO, XXXX or RSPR. The end date of the first rate and the beginning date for the new rate should be populated in :98A::RERA//. The two messages will be linked to the original instruction using the Repo reference and a linkage sequence with the message reference of the original instruction. Initiation: :20C::SEME//REPOVAROPEN1 :16R:REPO :98B::TERM//OPEN :22F::RERT//VARI :20C::REPO//REPRERATE1 :92A::REPO//4,33 :22F::SETR//REPU or :22F::SETR//RVPO Cancellation for rerate must use RATE as indicator: :23G:CANC :16R::LINK :20C::PREV//REPOVAROPEN1 :98B::TERM//OPEN :22F::RERT//VARI :20C::REPO//REPRERATE1 :92A::REPO//4,33 :22F::SETR//REPU or :22F::SETR//RVPO :22F::REPT//RATE Revised rate instruction must use RATE as indicator and RERA must be used to indicate end of first rate and beginning of second rate: :23G:NEWM :20C::PREV//REPOVAROPEN1 :98B::TERM//OPEN :98A::RERA//YYYYMMDD :22F::RERT//VARI :20C::REPO//REPRERATE1 :92A::REPO//4,66 :22F::SETR//REPU or :22F::SETR//RVPO :22F::REPT//RATE
