Nanwa - I've had experience with repo's at my previous place of employment and I'm reaching back behind the cobwebs as well, but I don't recall such limitations. Even though we had one special "term" repurchase agreement, the rest of ours were the typical overnight repo, which is more commonly the case, so I don't think there would be a concern the market would fluctuate that quickly. The only limitation I recall as far as the security pledged, was ensuring the security was classified under FASB 115 properly. But, I could be wrong. Is it possible what you remember was a bank policy for Asset Liability Mgmt and not a regulatory or legal requirement, since this would be more of a risk to the bank and not the customer?
For brief overview and reminder of repo requirements you might go to Kirchman's "BOB" and look under Reg D/Q. And, for a real fun read, the governing code (I believe)is 17 CFR 400.
Good Luck - and have fun