Corporation Tax Act 2009 section 544

Meaning of creditor quasi-repo

Section 544 defines what constitutes a "creditor quasi-repo", which covers arrangements that are economically equivalent to standard creditor repos but structured on non-standard terms.

• A creditor quasi-repo arises where a company (the lender) does not have a creditor repo but meets five conditions (A to E) relating to an advance, its accounting treatment, a securities transaction, a right or obligation to sell securities subsequently, and the extinguishment of the recorded financial asset
• The lender must make an advance of money or other assets under an arrangement and must record a corresponding financial asset in its accounts under generally accepted accounting practice
• There must be a sale of securities to the lender or another person, and the arrangement must confer a right or impose an obligation on the lender (or another person with supporting provisions) to sell those or other securities at a later time
• Under generally accepted accounting practice, the subsequent sale by the lender, or the receipt of assets or discharge of liabilities under the arrangement, must extinguish the financial asset originally recorded in the lender's accounts in respect of the advance