Repurchase agreements

A repurchase agreement (repo) is a form of short-term borrowing that provides the securities market participants with temporary credit opportunities to meet their financial needs. That is, "repo" raises funds in exchange for financial securities. According to the Law of the Republic of Azerbaijan “On Securities Market”, a repo agreement is defined as a purchase (sale) of investment securities with the obligation to repurchase (sell) investment securities under pre-determined conditions. Repo operations are divided into repo opening and repo closing operations.

The repo opening transaction is the first part of the repo transaction and is traded in the exchange trading system, and the repo closing transaction is the second part of the repo transaction and is closed in the exchange repurchase trading system. The repo period is the period between the opening and closing dates of the same repo. Repo operations in Azerbaijan are carried out in accordance with the exchange rules of the Repo General Agreement signed between the Baku Stock Exchange and its member investment companies, with the participation of the National Depository Center, which acts as a clearing organization.