Obligations in the Normal Course of Business describe how the SPV Operator manages Collateral Storage.
Last updated
In the Normal Course of Business the SPV Operator shall manage the Collateral Storage in accordance with the Adopted Guidance and all applicable laws and regulations.
To that extent, the SPV Operator shall use most or all available financial resources (including Cash Equivalents) to purchase Eligible Collateral. Some flexibility on reinvestment should be provided to the SPV Operator in order to timely fulfill existing or foreseen Retrieval Requests. It shall do so whenever available financial resources are existing in the Collateral Storage unless such available financial resources are part of a Retrieval Request or the amount is economically negligible. The following chart shows the replenishment of Eligible Collateral in the Normal Course of Business:
Any liquidity event affecting any collateral instrument (e.g. upon maturity of the instrument or as regular interest payment or other cashflow) is paid within the Collateral Storage, or more specifically to the custody bank accounts of the SPV.
Without delay, the SPV Operator initiates the purchase of new Eligible Collateral. This means that the amount of collateral, all other factors unchanged, will grow over time. The only way for the Minter to extract collateral is via the Retrieval Process.
The SPV Operator shall also cooperate with the Minter to execute Retrieval Processes. When a Minter requests a retrieval of collateral with the SPV Operator, the SPV Operator shall verify that a respective RetrieveID is existing in the Protocol. Once verified, the SPV Operator shall timely sell a corresponding amount of collateral and/or use liquidity from maturity collateral maturing at the same day and transfer the amount requested to be retrieved to the Minter.
