The Bank of Canada (BoC) is making a series of changes to the margin requirements for its mechanism for providing routine overnight credit, known as the standing liquidity facility (SLF)

The central bank announced on Monday that amid its ongoing review of the collateral policy for its SLF, it’s revising the margin requirements applied to certain securities that are accepted as collateral under the program. The SLF is the mechanism that the bank uses to keep the payment and settlement system running smoothly by providing secured, overnight loans to major payment system participants. The assets used as collateral for these loans are valued at market value less a margin, or “haircut,” to protect the bank from market risk.

Under the revisions announced on Monday, the BoC will impose increased haircuts for securities at longer maturities that are issued or guaranteed by the Government of Canada, the U.S. Treasury, a provincial government, or municipality. The central bank will apply the same haircut to all securities within a given asset class and maturity bucket, provided the security meets the minimum rating requirement. It’s also creating a separate category for certain mortgage-backed securities and introducing a new maturity bucket. The revised margin requirements take effect on June 16.

In setting these margin and collateral policies, the BoC says it manages its own risks, considers the implications for market functioning and the broader impacts on the financial system. When it comes to determining margin requirements, the bank takes a “through-the-cycle” approach, looking at historical pricing volatility and liquidity over a full market cycle.

Separately, the BoC also published a draft proposal for moving to a modified auction format for any future issuance of ultra-long (50-year) bonds by the federal government. Comments on the proposal are due by July 10.

The government has indicated that it may issue additional 50-year bonds in 2015-16, subject to market conditions. “Any future ultra-long bond issuance continues to be a tactical decision and is not considered to be part of the government’s regular borrowing program,” the BoC notes.