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QA2019-132 - "Earliest redemption date"

QA2019-132 - "Earliest redemption date"

Owned by SRB Services
Feb 01, 2024
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Resolution Reporting Subject Matter Guidance
Guidance Documents Securities
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QA2019-132

Question


According to new SRB Guidance 2019: "If an option exists for the holders of the instrument to request early reimbursement, or conditions for early reimbursement are contractually foreseen, the earliest occurrence date should be completed. If the early reimbursement relates to only a portion of the liability (e.g. early reimbursement of 50% of the nominal amount), the liability should be split to take into account this partial early redemption clause. For securities financing transactions subject to a netting arrangement and reported as a netting set, the day following the reporting date should be used."


Response


Any early reimbursement event that is not under the control of the issuer should be considered as an option for early reimbursement. In this case the earliest redemption date should be considered as th first date at which the event could occur.