Common use of Variable Rate Open Repurchase Agreement Clause in Contracts

Variable Rate Open Repurchase Agreement. A variable rate open repurchase agreement has a variable rate and an open maturity date. The initiation message should suffice to settle the opening exchange of securities collateral and cash. A cancellation message is required with a call indicator to cancel the initiation instruction in order to allow for the termination to be instructed. The call indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the repo. Additionally, the rate may change throughout the repo life; this business practice is called a rerate. These rate changes will require a cancellation using a rate indicator and a new instruction with the revised rate also using the rate indicator. Again, the rate indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the repo. To support the close out or rerate of this type of agreement the following additional business elements will be required: - Previous Reference- this will link the cancellation and new messages to the initiation message - Repurchase Type Indicator – this will indicate why the initiation instruction is being cancelled and the new/closing instruction is being sent. o Call indicator should be used for maturity changes o Rate indicate should be used for rate changes - Rate Change Date/Time – (for rerates only) this will indicate the effective date of the new rate and is required from an accounting agent perspective

Variable Rate Open Repurchase Agreement. A variable rate open repurchase agreement has a variable rate and an open maturity date. The initiation message should suffice to settle the opening exchange of securities collateral and cash. A cancellation message is required with a call indicator to cancel the initiation instruction in order to allow for the termination to be instructed. The call indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the repo. Additionally, the rate may change throughout the repo life; this business practice is called a rerate. These rate changes will require a cancellation using a rate indicator and a new instruction with the revised rate also using the rate indicator. Again, the rate indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the repo. To support the close out or rerate of this type of agreement the following additional business elements will be required: - Previous Reference- this will link the cancellation and new messages to the initiation message - Repurchase Type Indicator – this will indicate why the initiation instruction is being cancelled and the new/closing instruction is being sent. o Call indicator should be used for maturity changes o Rate indicate should be used for rate changes - Rate Change Date/Time – (for rerates only) this will indicate the effective date of the new rate and is required from an accounting agent perspective A variable rate open reverse repurchase agreement has a variable rate and an open maturity date. The initiation message should suffice to settle the opening exchange of securities collateral and cash. A cancellation message is required with a call indicator to cancel the initiation instruction in order to allow for the termination to be instructed. The call indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the reverse repo. Additionally, the rate may change throughout the repo life; this business practice is called a rerate. These rate changes will require a cancellation using a rate indicator and a new instruction with the revised rate also using the rate indicator. Again, the rate indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the repo. To support the close out or rerate of this type of agreement the following additional elements will be required: Previous Reference- this will link the cancellation and new messages to the initiation message Repurchase Type Indicator – this will indicate why the initiation instruction is being cancelled and the new/closing instruction is being sent Call indicator should be used for maturity changes Rate indicate should be used for rate changes Rate Change Date/Time – (for rerates only) this will indicate the effective date of the new rate and is required from an accounting agent perspective A repurchase/reverse repurchase agreement with multiple pieces of collateral must have a collateral count to indicate how many pieces of collateral are linked to the agreement. Multiple transactions are required to facilitate the communication of a multi collateral repo agreement. Overall, data elements that are not unique to multi-collateral should be consistent with the single collateral repo instruction. The following additional business elements are required from a custody perspective: Number Count – this indicates which number (relative to the total pieces of collateral) a single piece of represents (for instance 2nd piece of 4)

Variable Rate Open Repurchase Agreement. ‌ A variable rate open repurchase agreement has a variable rate and an open maturity date. The initiation message should suffice to settle the opening exchange of securities collateral and cash. A cancellation message is required with a call indicator to cancel the initiation instruction in order to allow for the termination to be instructed. The call indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the repo. Additionally, the rate may change throughout the repo life; this business practice is called a rerate. These rate changes will require a cancellation using a rate indicator and a new instruction with the revised rate also using the rate indicator. Again, the rate indicator should serve as an amendment rather than true cancellation as the Accounting Agent will need to maintain the accrual history on the repo. To support the close out or rerate of this type of agreement the following additional business elements will be required: - Previous Reference- this will link the cancellation and new messages to the initiation message - Repurchase Type Indicator – this will indicate why the initiation instruction is being cancelled and the new/closing instruction is being sent. o Call indicator should be used for maturity changes o Rate indicate should be used for rate changes - Rate Change Date/Time – (for rerates only) this will indicate the effective date of the new rate and is required from an accounting agent perspective