HAIRCUT Definition

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HAIRCUT is the amount of reduction in market value given to securities pledged as collateral, typically in a repurchase agreement or a reverse repurchase agreement. This reduc­tion assures the lender of funds in this type of transaction that, even if the collateral's market value declines, there is time to call for additional collateral to bring the collateral value back up to an acceptable level.

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PICKUP, in securities, is the higher yield obtained in a swap transac­tion-that is, the improved yield on the item being purchased relative to the selling yield on the security being liquidated.

COMPLIANCE PANEL is a multi-member committee chartered to investigate conformance to laws, rules or regulations. On many occasions they may be empowered by government agencies to make rulings as to compliance or non-compliance of any entity under their perusal.

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