A “creditor repo” is a repo from the point of view
of the lender, the company that purchases securities as collateral.
The cash that this company pays, although legally a purchase price,
equates in substance to a loan. Commercially, a repo from the point
of view of the cash lender is known as a “reverse
repo.”
A company (“the lender”) has a creditor repo if
all of the following conditions are met:
A company also has a creditor repo if it is a member of a
partnership that meets these conditions.
These conditions are intended to cover normal repos executed
under standard market documentation. However they also go slightly
wider: since Condition D does not specify to whom the lender is
entitled or obliged to sell the securities, this can be a person
other than the “borrower.”
There is an example of a creditor repo at
CFM17530a.
“Securities” is defined as UK equities, UK
securities or overseas securities (see
CFM17508).