1. Repurchase date : the day when trading contract is expired according to the REPO contract
  2. Repo rate : annual interest rate at which buyer shall be paid for interest on repurchase date according to the contract
  3. Trading amount : amount to be paid to seller by buyer in consideration of trading bonds according to the contract trading amount = (total face value of trading bonds X market value / 10,000) / (1 + haircut) (disregarding less then KRW1)
  4. Repurchase amount : amount to be paid to buyer by seller at repurchase date according to the contract repurchase amount = trading amount X (1 + repo rate X contract term / 365) (disregarding less then KRW1)
  5. Market value : It is the value calculated, on the basis of par value KRW10,000, by the KRX to evaluate trading bonds and is the result of simple arithmetic average of the evaluation value taken into consideration of transition interest
  6. Haircut : as the rate to secure fluctuation risk of price of trading bonds during REPO trading period, it is requested to seller by buyer. It plays a role of initial deposit
  7. Threshold-ratio : the rate established for exemption of additional deposit if ignorable
  8. Kind of REPO : This is made in combination of 3 categories of REPO trading and 8 transaction periods, and is classified into 24 kinds while the effect of general REPO reaches only up to designated kinds and therefore, kinds of REPO are maximum unit of set for quotation collection & execution which bring about competition between non-designated buying quotation and selling quotation
    Kind of REPO
    trading period
    1-day 3-day 7-day 14-day 21-day 30-day 60-day 90-day
    kind of repo government bond
    specific laws bond
    corporate bond
  9. General REPO : This means the quotation that intends to buy items by designating repo rate & quantities but without designating special items within the same "REPO transaction kinds"
  10. Special REPO : This means the quotation that intends to buy items by designating special items within the same "REPO transaction kinds"
  11. Return of dividend : This means the economic profit like interest, etc. accruing from trading bonds or margin bonds during trading period, and it reverts to the seller.
  12. Marking to market : Marking to market means a series of procedures by the KRX to maintain value of security on a proper level through collecting additional deposit after calculating the requesting amount of settlement of one or the other party’s all agreement of non-repurchase with the same party in preparation of price fluctuation of trading bonds per trading day in order to guarantee settlement performance of REPO trading.
  13. Substitution of bonds : This means, if trading contract is concluded as non-designated buying quotation, seller substitutes trading bonds with other bonds in the same bond category by receiving the consent from the buyer through the KRX from the next day of settlement to one day prior to the repurchase day.
  14. Exchange of bonds : This means that the seller exchanges the previous bonds with other items of the same category according to the buyer’s request through the KRX due to reasons of dishonor of issuer of trading bonds or his guarantor, or suspension of trading with banks or the like.
  15. Earlier repurchase : This means to take steps of repurchasing individual trading contract or all the contracts of non-repurchase with a party and clearing if there occur such causes as refusal of exchange, delisting of trading bonds, earlier refund of trading bonds and settlement default by either seller or buyer.