Effective today, the New York Fed is revising the RRP Counterparty Eligibility Criteria for government-sponsored enterprises and money market funds.
A money market fund (an open-end management investment company that is organized under the laws of a State of the United States, registered under the Investment Company Act of 1940, that holds itself out as a money market fund, and is in compliance with the requirements of Rule 2a-7 under such Act) must have, measured at each month-end for the most recent six consecutive months, either net assets of no less than $5 billion or an average outstanding amount of RRP transactions of no less than $1 billion.
A GSE (a government-sponsored enterprise chartered by the U.S. Congress) must have an average daily outstanding amount of RRP transactions of no less than $1 billion for the past three months or have an average daily amount outstanding of overnight money market transactions of no less than $100 million over the past three months.
As a result of these changes, the number of expanded reverse repo counterparties is expected to be around 150. All interested firms that are deemed to be eligible will be added to the RRP counterparty list.
All RRP counterparties are expected to satisfy the continued eligibility criteria. The New York Fed may remove an entity from the RRP counterparty list if such counterparty fails to continue to meet any of the eligibility criteria.
