Regulatory Alerts2019-12-20 | Direction No. 1 of 2019Repurchase and Reverse Repurchase Transactions of Dealer Direct Participants in Scripless Treasury Bonds and Scripless Treasury Bills
The Monetary Board of the Central Bank of Sri Lanka issued Directions No. 01 of 2019 to standardize repurchase and reverse repurchase transactions conducted by Dealer Direct Participants in scripless Treasury bonds and bills. The framework mandates market-value-based security valuation with tiered haircut requirements ranging from four to twelve percent, while establishing strict rules for collateral substitution, risk management, and counterparty reporting. Non-compliance triggers daily penalties of two percent, and all Dealer Direct Participants must align their transaction templates and existing agreements with the new guidelines by March and June 2020 respectively.
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