News Release
Gilt Repo Code of Best Practice

04 August 1998

The revised version of the Gilt Repo Code of Best Practice was published today and comes into immediate effect.

The first version of the Code was issued in November 1995, just before the start of the repo market in January 1996. The Code has now been updated in the light of subsequent market developments.

This updating process has been carried out by a working party reporting to the Stock Lending and Repo Committee (SLRC), which is chaired by the Bank of England and brings together a wide variety of associations and institutions with an interest in the repo market.

The original Code, together with the PSA/ISMA legal agreement and its gilt annex which form the ‘Gilt Repo Legal Agreement’, has undoubtedly played an important part in the safe and steady growth of the repo market for the first 2 ½ years.

Notes for Editors

Some of the main revisions to the Code are listed below:

Some of the text has been changed to reflect the creation of the Financial Services Authority, which is now responsible for the supervision of market participants.
The Code has been modified in several technical areas to reflect the upgrade of the CGO Service at the end of 1997 and subsequent changes to the settlement timetable.
The daycount convention for accrued interest will change on 1 November 1998 from actual/365 to actual/actual, and the Code recognises this.
The new Code acknowledges more widespread use of substitution rights (in the original Code, there was a presumption against substitution).
The code encourages participants to agree bilaterally prior to trading whether or not partial deliveries are acceptable (the presumption was against partialling in the original Code).

Any questions or comments you have on the revised Code should be directed to:

The Secretary
Stock Lending & Repo Committee
c/o Bank of England
Threadneedle Street
London
EC2R 8AH

Further copies can also be obtained from this address.