(1) Repurchase agreements are contracts by which a credit institution or the customer of a credit institution (transferor) transfers assets belonging to them to another credit institution or to a client of that credit institution (transferee) against payment of an amount and in which it is concurrently agreed that the assets must be re-transferred, or may be re-transferred, to the transferor at a later time against payment of the amount received or of some other amount agreed in advance.
(2) Where the transferee enters into obligation to re-transfer the assets at a certain point in time or at a point in time to be determined by the transferor, this is an authentic repurchase agreement.
(3) Where the transferee is solely entitled to re-transfer the assets at a certain point in time or at a point in time to be determined by them, this is an inauthentic repurchase agreement.
(4) In the case of authentic repurchase agreements, the assets transferred are to continue to be shown on the balance sheet of the transferor. The transferor is to state the amount received for the transfer as a liability towards the transferee. Where a higher or lower amount has been agreed for the re-transfer, the difference is to be distributed over the term of the repurchase agreement. Moreover, the transferor is to state in the notes the book value of the assets transferred under the repurchase agreement. The transferee is not permitted to show the assets transferred to the transferee under the repurchase agreement in the balance sheet; the transferee is to show on the balance sheet the amount paid for the transfer as a receivable from the transferor. Where a higher or a lower amount has been agreed for the retransfer, the difference is to be distributed over the term of the repurchase agreement.
(5) In the case of inauthentic repurchase agreements, the assets are to be shown not on the balance sheet of the transferor, they are to be shown on the balance sheet of the transferee. The transferor is to state at the foot of the balance sheet the amount agreed for the eventuality of a retransfer.
(6) Forward exchange transactions, financial future transactions and similar transactions as well as the issuance of own debentures for an abridged term are not considered repurchase agreements within the meaning of this provision.