5.1.10 Specifying Benefit of Commitment Reduction Fee (BCR) Details

Benefit of Commitment Reduction (BCR) fee is calculated if there is a commitment reduction by the borrower between trade date and the settlement date, inclusive of both the dates. BCR fee is calculated as per the formula given below:

BCR fee = (Principal paid between Trade date & Settlement date) * (1-Price)

The following example illustrates BCR fee calculation:

Consider a trade performed on 1st Sept and assume that there is a principal payment on 1st Sept. The payment for 1st Sept is considered for BCR computation.

Note:

There is no separate fee definition and settlement for BCR fee.