Statement Regarding Term Reverse Repurchase Agreements

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Operating Policy

Statement Regarding Term Reverse Repurchase Agreements

March 2, 2015

As noted in the January 28, 2015, Statement Regarding Term Reverse Repurchase Agreements, the Federal Open Market Committee (FOMC) instructed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to conduct a series of term RRP operations from mid-February through early March. These tests are intended to help the Desk examine how term RRP operations might work as an additional supplementary tool to help control the federal funds rate.

The tests will consist of four one-week term RRP operations to take place on successive Thursdays. The amount offered and maximum offering rate associated with each operation will be announced on or around the Monday prior to the operation. A tentative schedule, updated to include additional details on the operation to be conducted on March 5, follows:

Tentative Schedule of Term RRP Operations

operation date	settlement date	maturity date	amount offered	maximum offering rate
Thu, Feb 12, 2015	Thu, Feb 12, 2015	Thu, Feb 19, 2015	$10 billion	ON RRP offering rate on Feb 12 + 5 basis points
Thu, Feb 19, 2015	Thu, Feb 19, 2015	Thu, Feb 26, 2015	$30 billion	ON RRP offering rate on Feb 19 + 5 basis points
Thu, Feb 26, 2015	Thu, Feb 26, 2015	Thu, Mar 5, 2015	$50 billion	ON RRP offering rate on Feb 26 + 5 basis points
Thu, Mar 5, 2015	Thu, Mar 5, 2015	Thu, Mar 12, 2015	$50 billion	ON RRP offering rate on March 5 + 3 basis points

Each of these operations will be conducted from 9:30 a.m. to 10:00 a.m. (ET), and each bidder will be limited to two bids per operation. Each bid will be subject to a maximum size equal to the total amount offered in a given operation. If the sum of the bids received is greater than the overall size limit, awards will be allocated using a single-price auction based on the “stop-out” rate at which the amount offered is reached, with all bids below this rate awarded in full at the stop-out rate and all bids at this rate awarded on a pro rata basis at the stop-out rate. The stop-out rate will be determined by evaluating all bids in ascending order by submitted rate up to the point at which the total quantity of offers equals the total amount offered. Undersubscribed auctions will be awarded at the highest rate submitted by any bidder.