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Alternative investments

 

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• Fin. deposits
• Strips
• Repos
• Fondtesoro

 

   Financial Accounts and Deposits on Treasury Securities

•  Another way to invest in Treasury Securities is through the "Financial Accounts and Deposits" on Treasury Securities offered by financial institutions.
  
  
•  Through Financial Accounts and Deposits, financial institutions receive funds and immediately invest them, on behalf of their customers, in Treasury Securities. The institution, on a regular basis and in short periods of time, is committed to purchase and immediately sell the necessary Treasury Securities to the holders of the financial account or deposit.
  
  
•  When the transaction matures, it is automatically renewed, unless the investor decides to cancel the agreement. As a result, financial accounts and deposits are no more than a string of successive repos governed by one single contract.
  
  
•  Depending on the maturity of the successive repos and on the way in which the Treasury Securities are allocated to investors, these instruments may be split into two categories:
•  If the maturity of the successive repos is less than 15 days or the Treasury Securities supporting the account are allocated to the different investors in co-ownership -each holder of an account owns a portion of the aggregate amount of securities purchased by the bank- the product is denominated a "Financial Account".
  
•  If the maturity of the successive repos is above 15 days and the securities are allocated to each holder on an individual basis, the product is known as a "Financial Deposit".
  
  
•  Finally, the features of these accounts -such as the type of Treasury Securities supporting them, the minimum disbursement, the availability of funds, the return and so on- differ from one institution to another, but must always appear in the contract signed by the investor. d