RFQ: Consultancy to Develop Operational Rules and Guidelines for the Conduct of Repurchase Transactions by the Central Bank of The Bahamas

Objectives and Purpose

The CBOB has successfully established a Real-time Gross Settlement System (RTGS) and a Central Securities Depository known as the Bahamas Government Securities Depository (BGSD). The BGSD serves as the primary registry for government and government agency securities, which are now fully dematerialised and held in scripless form. The settlement of traded government securities is facilitated by the CBOB through BGSD, employing a delivery versus payment mechanism on a real-time gross basis (DVP1).

With the Master Repo Agreements now in place, the CBOB is now eager to implement market operations and a standing liquidity facility through repos. There is thus a need to develop comprehensive rules and guidelines for the repo operations, which will be conducted through the BGSD. The primary objectives of this consultancy are:

Develop clear and comprehensive guidelines for Intraday, overnight, and long-term repo operations, aligning them with the Master Repo Agreements developed by the CBOB.

1. Formulate operational rules and procedures to govern repo transactions, settlement processes, collateral management, margin maintenance, handling of coupon payments, substitution of securities, accounting of transactions, and any other crucial elements important for repo operations in The Bahamas.
2. Incorporate risk management principles into the guidelines and rules to effectively mitigate operational, credit, and market risks associated with repo operations.
3. Ensure that the developed guidelines and rules adhere to the applicable legal and regulatory frameworks in The Bahamas and recommend necessary changes, if needed, to enhance efficiency.

Scope of Work and Required Output

The scope of work includes but is not limited to:

1. study and analyse the recently developed Master Repo Agreements for Intra-day and overnight Repos and Long-term repo operations.
2. collaborate with key stakeholders, including representatives from the Central Bank, and other relevant parties to develop a detailed report on guidelines and rules for operationalising Repos by the Central Bank of The Bahamas. This will encompass all crucial elements for repo operations, including transaction procedures, settlement processes, collateral management, margin maintenance, handling of coupon payments, substitution of securities, accounting practices, etc.
3. Formulate operational procedures for conducting both intra-day and long-term repo operations. Collaboration with Montran, the system provider for repo operations, may be necessary to accomplish this.
4.  Incorporate risk management principles in the guidelines and rules to mitigate operational, credit, and market risks.
5. Ensure alignment of the guidelines and rules with the existing legal and regulatory frameworks in The Bahamas and recommend changes, if necessary, for effective and efficient implementation of repo operations.

    Required Expertise

The consultant should possess the following qualifications and expertise:

a.   A Master's degree or its equivalent in economics, banking, finance, accounting, or a related field.

b.   A minimum of 10 years of relevant experience.

c.   Extensive experience in delivering Technical Assistance on repo transactions.

d.   Strong writing skills, as evidenced by publications of relevant reports and/or articles.

Please apply for this contract by submitting a Proposal to: [email protected].by 5 PM GMT on 15 November 2023.  

Applicants must also complete the Quote Submission Documents attached to the Request for Quotation (RFQ) document.

The brief proposal should show how the consultancy would be carried out to meet the specific objectives set out in this TOR. It should include a short statement of the candidate’s relevant expertise and experience. 

Evaluation will be based on competency and cost.