Read the terms and conditions of the Standing Term Liquidity Facility (STLF).
Operation details
- STLF advances are made at the discretion of the Bank of Canada to eligible financial institutions subject to the conditions below.1
Eligible counterparties
- Federally or provincially prudentially regulated members of Payments Canada for which the Bank of Canada has no concern about their financial soundness.
- The Bank would need sufficient and timely information about the financial institution to make an informed judgment about any possible soundness concerns.
Process to access facility
- Requests for an advance under the STLF should be made by sending the STLF Application Form by email to STLF@bankofcanada.ca.
- Counterparties interested in pledging marketable securities for securing the advance should also submit the Collateral Form for Marketable Securities by email to STLF@bankofcanada.ca.
- Counterparties interested in assigning mortgage loans for securing the advance should also submit the Form of Blanket Assignment of Mortgage Loans by email to STLF@bankofcanada.ca.
Eligible collateral
- Any marketable security eligible for the Standing Liquidity Facility (SLF)2
- Canadian-dollar non-mortgage loans made to Canadian residents3
- Insured Canadian-dollar residential mortgage loans to Canadian residents registered or held under the borrower’s name
- Uninsured Canadian-dollar residential mortgage loans to Canadian residents registered or held under the borrower’s name with a loan-to-value (LTV) ratio at or below 80 percent
Margin requirements
- Marketable securities and Canadian-dollar non-mortgage loans are subject to the same margin requirements as applied under the Standing Liquidity Facility (SLF).
- Insured Canadian-dollar residential mortgage loans are subject to a 10 percent margin requirement.
- Uninsured Canadian-dollar residential mortgage loans are subject to a margin requirement of between 10 percent and 50 percent based on the Bank of Canada’s estimate of the current loan-to-value (cLTV) ratio of the individual mortgages. The Bank will provide a collateral-to-portfolio value based on a weighted-average margin of the individual loans within the portfolio.
Margin calls
- All outstanding loans will be subject to margin calls if the value of the posted collateral falls below a threshold acceptable to the Bank of Canada. All eligible collateral may be provided for margin calls.
Counterparty settlement instructions
- Securities used as collateral must be pledged using CDSX of CDS Clearing and Depository Services Inc. or be physically delivered to the Bank in certificated form by 15:00 (EST) on the day of the advance. Securities to be delivered shall be confirmed with the Bank by noon on the day of the advance.
- The Bank of Canada’s Canadian Depository for Securities (CDS) settlement customer unit identifier (CUID) is BOCB.
- Eligible counterparties are encouraged to pre-position loan collateral with the Bank of Canada well in advance to facilitate timely provision of liquidity.
Term to maturity
- Up to 30 calendar days, renewable at the Bank of Canada’s discretion
Interest rate
- Borrowing collateralized by marketable collateral eligible for the Standing Liquidity Facility (SLF) is charged an interest rate equal to the one-month overnight index swap (OIS) rate plus 35 basis points.
- Borrowing collateralized by other eligible (non-marketable) collateral is charged an interest rate equal to the one-month OIS rate plus 75 basis points.
- In all cases, the minimum interest rate is the Bank rate.
Currency
- Liquidity is provided in Canadian dollars only. Financial institutions are responsible for ensuring they have reliable arrangements for liquidity support in foreign currencies.
Interest calculation
- Interest on the funds will be calculated on an actual/365-day basis.
Legal arrangements
- Eligible counterparties must have made the appropriate legal arrangements with the Bank of Canada.
- The Bank reserves the right to change the terms of the STLF by posting a revised version of these terms and conditions.