Contingent Non-Bank Financial Institution Repo Facility (CNRF)

This page provides information about the CNRF and contains links to all relevant documentation so that eligible non-bank financial institutions (NBFIs) can apply

In this section

Overview

This page provides information about the Contingent Non-Bank Financial Institution Repo Facility (CNRF) and contains links to all relevant documentation so that eligible non-bank financial institutions (NBFIs) can apply. 

The purpose of the CNRF is to address future episodes of severe gilt market dysfunction that threaten UK financial stability arising from shocks that temporarily increase non-banks’ market-wide demand for liquidity. It is likely to be used in preference to asset purchases where lending is effective in tackling gilt market dysfunction and when the demand for liquidity is outside the reach of the Bank’s existing Sterling Monetary Framework (SMF) lending facilities. 

The CNRF will lend cash to participating insurance companies, pension funds and liability-driven investment funds against UK sovereign debt (gilts) for a short lending term. The Bank will accept both conventional and index-linked gilts (including unconventional gilts such as strips).

As a contingent facility, the CNRF will be activated at the Bank’s discretion in episodes of severe gilt market dysfunction that threaten UK financial stability. It is deliberately designed with flexibility in mind, so as and when we judge it appropriate to activate the CNRF, we will calibrate its pricing and terms to suit the needs of the market at that time.

Motivation and purpose of the Contingent NBFI Repo Facility

The Bank has an objective to protect and enhance the financial stability of the UK. As NBFIs continue to grow in significance both in terms of total market footprint and influence over the supply of finance to UK businesses, the impact NBFIs have on financial stability has increased. Past events such as the 2020 ‘dash for cash’ and 2022 LDI episodes have shown that vulnerabilities in NBFIs can propagate liquidity stresses in core UK financial markets and lead to periods of forced selling of gilts by NBFIs that may threaten UK financial stability.

It is first and foremost for NBFIs to manage the liquidity risks they face. But it is not feasible for NBFIs to maintain a level of resilience that would self-insure against the most extreme system-wide liquidity stresses, where increased liquidity demand may lead to forced selling among NBFIs. In such circumstances, central bank facilities can support financial stability by providing backstop liquidity by lending to NBFIs, reducing their need to sell assets.

The Bank has developed the CNRF to address severe dysfunction in the gilt market that threatens UK financial stability arising from shocks that temporarily increase non-bank financial institutions’ (NBFIs) demand for liquidity. 

As a contingent facility, the CNRF will be activated at the Bank’s discretion in episodes of severe gilt market dysfunction that threaten UK financial stability, to lend cash, against gilt collateral, to participating insurance companies, pension funds and liability-driven investment funds against UK sovereign debt (gilts) for a short lending term.

For more details on the purpose and motivation of the facility, see the July 2024 Explanatory Note.

Eligible counterparties

The CNRF is open to the following types of institutions, subject to meeting the facility’s wider eligibility criteria:

  • Insurance companies;
  • Defined benefit occupational pension schemes (‘pension funds’); and
  • Investment Funds or sub-funds thereof whose investment strategy seeks to match the sensitivity of its assets to United Kingdom interest rates or inflation to that of its investors’ pre-defined liabilities (‘LDI funds’)

These firms are collectively referred to as “ICPFs”. Eligible ICPFs must be appropriately regulated or authorised, as applicable, by a relevant regulatory or supervisory authority as determined by the Bank from time to time.

To maximise the targeted effectiveness of the CNRF in addressing severe gilt market dysfunction, while recognising limits to the number of firms the Bank can onboard, eligible participants will need to make a material contribution to gilt market functioning, as measured by their holdings of gilts. As set out in the January 2025 Market Notice, ICPFs that own a market value of £2 billion gilts will normally be regarded as meeting this requirement. This minimum level of gilt holdings will be reviewed annually (the Bank will consider a range of factors in reviewing the level of the threshold, including any changes in the market value of the free-float of the gilt market), and ICPFs will be informed of any changes via an updated Market Notice.

Further information, including detailed eligibility criteria, is available in the following document(s):

Publication arrangements

In the event that the CNRF is activated we will publish total aggregate borrowing from the facility, but will not publish individual firm-level activity. This is in line with our long-running approach to disclosure for the Bank’s other market operations.

Information for applicants

Firms wishing to apply to participate in the CNRF should complete the Application Form, the Know Your Customer Questionnaire, the Financial Data Form and the Financial Data Form Certificate, and send to CNRFapplications@bankofengland.co.uk. These forms can be completed by the applicant itself or by a representative who will act on its behalf in relation to the CNRF. 

Where an applicant wishes to participate in the CNRF through a representative, the Bank will require the applicant and (for certain investment funds) its fund manager and the proposed representative enter into an Appointment Letter.

Applicants will need to provide a completed authorised signatory evidence form along with the Application Form – this can be found in the Application Form in Section 7. Where an applicant would like to appoint a representative, an authorised signatory evidence form should also be completed in respect of the representative. We have prepared guidance for applicants on the evidence required to support your authorised signatory evidence form.

Applicants will also need to complete the Front Office Contact Number form, which can also be found in the application form in Section 8.

We will need you to provide legal opinions in connection with your application:

For some applicants, we may require a guarantee and an associated legal opinion to be provided. The Bank will inform applicants which we view as requiring a guarantee and an associated legal opinion.

For a guide to the legal documentation governing participation in the CNRF, see:

For queries on applying to participate in the CNRF, contact the applications team by email CNRFapplications@bankofengland.co.uk.

Information for participants

The Bank will announce the CNRF’s activation in advance via a Market Notice. This will include the timetable of any planned operation and full terms. This information will also be available on the Bank’s wire services pages.

Our electronic tendering system, Btender, is used to carry out auction operations. All eligible participants that are signed up to our auction operations must use Btender, and take reasonable steps to ensure they are able to access this system across all locations they work from. Participants will also require access to SWIFTnet. 

Collateral management

For information on collateral management for the CNRF, please see Settlement and collateral management.

Contact details

FAQs

Back to top

This page was last updated 17 February 2025