Services
Repo transactions with OVDP
Place funds against collateral in Ukrainian government bonds (OVDP) or raise funds against your own OVDP. For individuals and legal entities; for individuals, with no income tax.
NSSMC license No. 112 of 17 February 2017 for brokerage and dealer activities
Two scenarios
What you can do with repo
-
Place funds
You provide funds and receive OVDP as collateral. At the end of the term, the funds are returned to you with interest, and the securities go back to the other party.
-
Raise funds
You provide your OVDP as collateral and receive funds — without selling the bonds. At the end of the term, you repay the funds with interest and take back the securities.
How it works
A deal in two legs
-
First leg · date 1
Party A Party B
Party A provides funds; Party B provides securities as collateral.
-
Second leg · date 2
Party A Party B
Party B repays the funds with interest; Party A returns the securities.
-
Rate
The financial result is the difference between the amounts of the first and second legs, which depends on the interest rate (in percent per annum).
-
Term
The time between the first and second legs — from one week.
-
Price adjustment
Securities are taken as collateral at a price below the current market price. The difference between this price and the market price is the “price adjustment” (haircut).
Exchange repo
Two exchange repo modes
On the PFTS exchange, repo trades are concluded in the standard mode and in the risk-controlled mode. We agree on the mode to suit your goal, amount and collateral.
| Parameter | Standard repo | Risk-controlled repo |
|---|---|---|
| Who guarantees performance | The parties to the trade | PJSC “Settlement Center” as the central counterparty |
| Collateral | Securities on the PFTS exchange list agreed by the parties | A limited list of securities set by the Settlement Center; the underlying asset is hryvnia OVDP |
| Term | From one week to 180 calendar days | From one week; the second leg no later than the date set by the central counterparty (contract up to 365 days) |
| Minimum amount | Agreed by the parties | UAH 1 million for the first leg |
| First-leg settlement | 0 to 2 business days, delivery versus payment via the Settlement Center | On the trade date or immediately after acceptance by the central counterparty |
| Risk control | Collateral price adjustment (haircut) | Haircut, daily revaluation of collateral and margin calls |
| Trading participants | All PFTS trading participants | Only clearing members of the Settlement Center |
Based on data from the PFTS exchange (in Ukrainian) ↗ and PJSC “Settlement Center”; terms may change. BTC Broker concludes trades on the exchange on your behalf as a trading participant.
With a central counterparty
Repo with risk control
A mode in which the Settlement Center (PJSC “Settlement Center”) acts as the central counterparty and guarantees performance of the deal. Deals are concluded on the PFTS and Perspektyva exchanges.
-
Central counterparty
If one party fails to perform the deal, the Settlement Center guarantees performance of the contract or payment of the amount due to the bona fide party from the defaulting party’s margin.
-
Daily monitoring
Collateral and obligations are revalued daily; the center monitors margin adequacy and issues margin calls.
-
OVDP as collateral
The underlying asset is hryvnia OVDP. Margin is posted in hryvnia or in OVDP accepted by the Settlement Center.
-
Two exchanges, one pool
Positions on PFTS and Perspektyva are netted in a single clearing pool; a position can be moved between exchanges without additional margin.
- Minimum first leg
- UAH 1 million
- Maximum term
- 365 days
- Currency
- Hryvnia
Collateral haircut by OVDP time to maturity
| Time to maturity | Haircut |
|---|---|
| up to 0.5 years | 10% |
| 0.5–1 year | 15% |
| 1–1.5 years | 20% |
| 1.5–2 years | 25% |
| 2–3 years | 30% |
| over 3 years | 35% |
Parameters are based on data from PJSC “Settlement Center” and may change; current terms and monthly repo market reviews are on the Settlement Center website ↗.
Benefits
Why repo
-
Tax-free for individuals
Individuals’ income from repo transactions with OVDP is not taxed.
-
Short terms
Funds can be placed for a short period — from one week.
-
Backed by OVDP
Collateral: government bonds or other securities agreed by the parties.
-
Exchange technology
The deal is settled through the exchange trading system on a “delivery versus payment” basis.
What to consider
The party providing its funds or securities accepts the risk that the other party will not perform the second leg of the repo if the market price of the securities changes significantly. This is why a price adjustment is applied.
Get started
Let’s discuss the terms of your deal
We agree the rate, term and collateral during a consultation. See the fees on the tariffs page.
Questions