SOMA TSLF Options Program: Frequently Asked Questions
The following is intended to address operational questions about the System Open Market Account (SOMA) Term Securities Lending Facility Options Program (TSLF Options Program or TOP).
Effective December 2, 2008
What is TOP?
What is the purpose of TOP?
How is TOP related to TSLF auctions?
What is the typical length of a TOP-related loan?
How are options allocated among dealers?
How are options exercised?
Can a dealer exercise an option early?
How often will the New York Fed
sell these options?
How much can dealers bid at each auction?
Can a dealer transfer TOP options?
When will the New York Fed announce
Are the auction results released to the public?
Are primary dealers required to bid? Can other market participants
bid in the operation?
How do dealers bid?
What is the minimum bid rate for TOP auctions?
In what sequence are bids considered?
How many bids can a dealer submit in TOP auctions?
What is the minimum and maximum par amount for which a dealer can
What dollar increments should be used when bidding?
How many decimal places should be used when bidding?
How are dealers notified of awards?
Where do dealers call if they experience difficulties?
Fees and Settlement
How is the option fee calculated?
The full option fee is owed regardless of whether or not the option is exercised. If the option is exercised, a separate loan fee will be assessed based on the criteria set forth in the TSLF terms and conditions.
How long will TOP be in operation?