The Bank of Canada is broadening the list of acceptable collateral and revising margin requirements for its Standing Liquidity Facility.

The list of assets that can be used as collateral will be expanded to include the stripped coupons and residuals of federal government guaranteed securities, as well as those of eligible provincial government securities, and provincial government guaranteed securities. The Bank says the expanded list doesn’t represent a new asset class or new credit exposure.

Additionally, the Bank has revised the margin requirements applied to securities accepted as SLF collateral. The changes to eligible securities and margin requirements will be effective July 19.

In a separate release the central bank also announced several operational changes to its bond buyback program. The changes result from a consultation that took place in April between officials from the Bank, the Department of Finance, institutional investors, government securities distributors, and others.

Among the changes, starting in August, the frequency of cash-management bond buyback operations will be increased on a pilot basis.

The updated list of assets eligible as collateral under the SLF and related margin requirements can be found at: www.bankofcanada.ca/en/financial/securities_170610.pdf.

IE