documentation to be in place with each other, along with credit lines, before trading can take place, which is not the case in the interbank broking market. A gilt repo agreement is not required with the broker, although firms will certainly have counterparty agreements in place with them. Typical of the firms providing broking ser- vices are Garban ICAP, Tullet & Tokyo, and King & Shaxson Bond Bro- kers Limited, part of Old Mutual plc. Brokers tend to specialize in different aspects of the gilt market. For example, some concentrate on GC repo, and others on specials and specifics; some on very short maturity transactions, and others on longer term trades. Brokerage is usually 1 basis point of the total nominal amount of the bond transferred for GC, and 2 basis points for specific and special repo. Brokerage is paid by both sides to a gilt repo.       The range of participants has grown as the market has expanded. The overall client base now includes banks, building societies, overseas banks and securities houses, hedge funds, fund managers (such as Standard Life, Scottish Amicable, and others), insurance companies, and overseas cen- tral banks. Certain corporates have also begun to undertake gilt repo transactions. The slow start in the use of tri-party repo in the UK market has probably constrained certain corporates and smaller financial institu- tions from entering the market. Tri-party repo would be attractive to such institutions because of the lower administrative burden of having an external custodian. The largest users of gilt repo will remain banks and building societies, who are required to hold gilts as part of their Bank of England liquidity requirements.   Bank of England Open Market Operations The Bank of England introduced gilt repo into its open market opera- tions in April 1997. The Bank aims to meet the banking systems liquid- ity needs each day via its open market operations. Almost invariably the markets position is one of a shortage of liquidity, which the Bank gener- ally relieves via open market operations conducted at a fixed official     interest rate. The Banks repo operation in this case is actually a reverse repo. The Bank will reverse in gilts and eligible Bills. The reason central banks choose repo as the money market instrument to relieve shortages is because it provides a combination of security (government debt as col- lateral) and liquidity to trade in large size.