Bond repo and gensaki transactions are primarily transactions in which funds are exchanged for JGBs. These transactions play an important role in the money market as the safest way of raising funds by using government bonds with high credit quality and liquidity. We conduct intermediary services that match the need for both the borrowing of funds (lending JGBs) and the lending of funds (borrowing JGBs). In addition to cash collateral, we also make loans to JGBs against securities such as stocks. There are two types of transactions: bond repo and gensaki transactions.
These transactions take the form of loans. We borrow bonds after depositing cash collateral with a lender, and we lend bonds after receiving cash collateral from a borrower. These transactions can either be Special Collateral (SC) transactions that specify an issue or a General Collateral (GC) transactions that do not specify an issue.
These transactions take the form of sales. The economic effects are the same as in the form of loans, but overseas, gensaki transactions have become a global standard transaction format. A lender sells securities and receives cash in return. Gensaki transactions are conditioned on repurchase or resale agreements.