What is hold-in-custody repo in SAP FIN-FSCM-TRM - Treasury and Risk Management?

SAP Term: hold-in-custody repo

• Component: FIN-FSCM-TRM

• Component Name: Treasury and Risk Management

• Description: A repurchase agreement in which the underlying security remains in the borrower's security account. For the term of the transaction, the borrower only blocks the security as margin for the benefit of the lender. In Hungary, the accounting treatment of hold-in-custody repos is governed by the general rules applicable to loan transactions.

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• Key Concepts: 
  A hold-in-custody repo is a type of repurchase agreement (repo) in which the seller of the security retains custody of the security throughout the duration of the agreement. This type of repo is typically used when the buyer does not have a custodian or when the seller wishes to retain control over the security. 
  
  How to use it: 
  In SAP Treasury and Risk Management, a hold-in-custody repo can be set up by entering the relevant details into the system. This includes information such as the security being sold, the buyer and seller, and the terms of the agreement. Once all of this information is entered, the system will generate a contract that can be signed by both parties. 
  
  Tips & Tricks: 
  When setting up a hold-in-custody repo in SAP Treasury and Risk Management, it is important to ensure that all of the details are accurate and up-to-date. This includes making sure that all parties involved are aware of their obligations under the agreement. Additionally, it is important to ensure that all relevant documents are signed and stored securely. 
  
  Related Information: 
  For more information on repurchase agreements in SAP Treasury and Risk Management, please refer to the official documentation available on SAP Help Portal. Additionally, there are several online resources available that provide further information on this topic.