Securities Lending and Repo Lifecycle

Open trade, daily mark-to-market and margin call, then recall and return through a tri-party agent

Securities Lending and Repo Lifecycle Open trade, daily mark-to-market and margin call, then recall and return through a tri-party agent deliver securities post collateral + haircut release securities daily mark-to-market margin call: shortfall post variation margin recall securities return securities return securities return collateral + fee Open Daily servicing Recall + return Lender · cash provider / owner · Sequence participant Lender cash provider / owner Agent · tri-party collateral · Sequence participant Agent tri-party collateral Borrower · collateral provider · Sequence participant Borrower collateral provider Legend request return security async trace

Open Trade

  • • Securities move out against collateral posted with a haircut
  • • A tri-party agent holds and services the collateral
  • • The main path is delivery-versus-delivery, not a naked loan

Daily Servicing

  • • Mark-to-market revalues both legs every day
  • • A shortfall triggers a margin call for variation margin
  • • Collateral is topped up before exposure can drift

Recall + Return

  • • The lender can recall securities on demand
  • • Return messages are quieter than the forward legs
  • • Collateral comes back with the accrued lending fee

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