Triparty Repo (TPR) Rates #primers

The aim of Triparty repo (which simply means three entities involved) is for cash lenders to lend cash to cash borrowers without worrying about what specific security backs the repo loan, a so-called “general collateral” (GC) repo.

Triparty GC repo transactions are negotiated between two parties but are settled via a clearing bank. Trades are processed through the Bank of New York Mellon (BNYM), the sole triparty agent in the repo market. JPMorgan used to run a triparty service but, because of regulatory constraints, pulled out in 2016.

BNYM takes custody of the cash and securities during Triparty trades, values and monitors collateral, reports trade status to both parties, and settles balances and assets once finished.