Legal protection on repo market creditors in right case of insolvency under Rwandan law: a comparative study

Abstract

This thesis entitled “Legal protection of repo market creditors’ rights in case of insolvency under Rwandan law: a comparative study” focuses at examining the Rwandan legislations in the context of the protection of repo market creditors in order to avoid different challenges faced in the repo market transactions. The present thesis examines the foreign legislations like that of United States of America and Europe to assess whether some protection aspects may be borrowed from there. After a thorough analysis was observed that Rwandan legal framework does not clearly guarantee the protection of repo market creditors especially in the event the counterparty falls bankrupt, therefore, the clear protection is needed.

In fact, this thesis is divided into three chapters. The first chapter discusses the key concepts and presents an overview on repo market. The second chapter analyzes the existing legal framework regulating repo whereby imbalances and ineffectiveness of regulations relating to the repo market were highlighted; this part of thesis examines the challenges toward the creditors because of inadequacy of effective regulations which are related to repo market. Furthermore, the case law was examined which is related to repo market. The third chapter suggests about the legal mechanisms from privileges of repo in different countries. In this chapter, foreign regulations were examined in order to learn from their practices within the protection of creditors in repo market. The establishment of particular law relating to repo market was suggested.

In brief, the researcher recommends that a clear protection of repo market creditors against counterparty credit risk should be provided; there should be an effective collateral liquidation in case the repo borrower becomes insolvent; and lastly the amendment of insolvency law is also suggested as an effective mechanism.