Some U.S. repos not aligned to new process: New York Fed

A tri-party repurchase agreement is typically an overnight loan in which a bank or a Wall Street dealer pledges a security to a money market fund or an investor in exchange for cash. The loan is processed through one of the industry's two clearing banks, either JPMorgan & Chase or Bank of New York Mellon Corp.

The Tri-party Repo Infrastructure Reform Task Force, which was created in 2009 and sponsored by the Federal Reserve, developed a list of reforms for this $1.6 trillion sector in the wake of the global credit crisis.

One of the reforms is aimed at implementing a settlement scheme to reduce the volume of tri-party repos funded by intraday loans from clearing banks.

While most of these repos now meet with the reformed settlement process, a "subset" of them does not and needs intraday funding from clearing banks to settle, the New York Fed said in a statement on the update of tri-party repo reform.

(Reporting by Richard Leong; Editing by Chizu Nomiyama)