REVISED SOMA SECURITIES LENDING PROGRAM TERMS AND CONDITIONS
(POST 9/11/01)

Effective September 11th, the Desk relaxed the following terms of the SOMA securities lending program (previously revised 9/7/99):

  • Per dealer limit: $500 million total par in outstanding loans per dealer limit suspended until further notice;
  • Per issue limit: $100 million per issue per dealer limit suspended until further notice;
  • Fail penalty fee: outstanding loans to be extended at the original loan fee rate, instead of general collateral rate until further notice;

Note: : following the initial operation on 9/11 that commenced at 12:00 p.m. and closed at 12:15 p.m., the desk conducted a second securities lending operation between 1:00 p.m. and 2:00 p.m.

Effective September 13th through September 17th, the Desk continued to extend the relaxed securities lending program terms, with the following modification: minimum bid size raised to $25 million (from $1 million) to temporarily ease operational burdens.

Note: On September 13th and 14th, the securities lending operation was conducted between 1:30 p.m. and 2:15 p.m.; and on September 17th, the operation was conducted between 11:30 a.m. and 12:15 p.m.

Effective September 18th :

  • Minimum fee rate: minimum fee rate was lowered to 1.00%;
  • Per issue limit: maximum bid amount for a single issue per dealer returned to $100 million;
  • Minimum bid size: minimum bid size returned to $1 million;

Effective September 25th, the fail penalty fee was reverted to general collateral. All other terms of the program as set on September 18th remained effective.

Effective September 27th through October 3rd :

  • SOMA lending limit: percentage of each Treasury issue owned by SOMA with a maturity of two weeks or longer that is available for lending each day was temporarily raised to 75% (from 45%);
  • Per issue limit: maximum bid amount for a single issue per dealer was raised to $250 million, except for the 4 ¼% 11/15/03 and 5% 8/15/11 (due to portfolio limitations), which remained at $100 million per issue;

On October 3rd, the Desk extended the relaxed securities lending program terms (in effect since 9/27) to October 10th and further relaxed the per issue limit by raising it on the 4 ¼% 11/15/03 to $250 million.

On October 18th, the Desk returned to its standard SOMA securities lending program terms, dated as September 7, 1999, except with respect to the minimum fee rate, which remained at 1.00%.

For more information on the standard SOMA securities lending program terms, please see:
August 26, 1999 - Announcement of Change in Lending Limits for SOMA Securities Lending Program,
September 7, 1999 - Revised SOMA Securities Lending Program – FAQs, and
September 7, 1999 - Revised SOMA Securities Lending Program Terms and Conditions.