Government Securities (Debt Market and Investment) Regulations 2023

No. S 124

Government Securities
(Debt Market and Investment) Act 1992

Government Securities
(Debt Market and Investment) Regulations 2023

In exercise of the powers conferred by section 31 of the Government Securities (Debt Market and Investment) Act 1992, the Minister for Finance makes the following Regulations:

PART 1

PRELIMINARY

Citation and commencement

1.  These Regulations are the Government Securities (Debt Market and Investment) Regulations 2023 and come into operation on 15 March 2023.

Definitions

2.  In these Regulations —

“allotment day” means the date specified in a public notice as the day of allotment of an issue of non‑transferable Government securities;

“applicant” means a person who makes an application;

“application” means —

(a) in Parts 2 and 3 — an application to purchase one or more Government securities or Treasury Bills issued after conducting an auction in accordance with Division 2 of Part 3 or by a quantity ceiling method in accordance with Division 3 of Part 3;

(b) in Part 4 — an application to purchase one or more transferable Government securities issued by syndication in accordance with Part 4; and

(c) in Part 6 — an application to purchase one or more Government securities or Treasury Bills issued after conducting an auction in accordance with Division 2 of Part 3 or by a quantity ceiling method in accordance with Division 3 of Part 3, or one or more transferable Government securities issued by syndication in accordance with Part 4, as the case may be;

“auction day” means the date specified in a public notice as the auction day of an issue of transferable Government securities or Treasury Bills;

“bid yield” means the yield expressed in an application;

“cut-off time” has the meaning given by regulation 8;

“maturity date” means a date on which any Government security or Treasury Bill is redeemable at par;

“multiple pricing method” means the manner of allotting transferable Government securities or Treasury Bills set out in regulation 13;

“non-transferable Government securities” means book‑entry Government securities that, under the terms of their issue, cannot be transferred or pledged except with the prior written approval of the Authority;

“public notice” means a public notice under section 30(2) of the Act inviting the public to apply to take up an issue of Government securities or Treasury Bills specified in the public notice;

“quantity ceiling method” means the manner of allotting non‑transferable Government securities set out in regulation 15;

“relevant electronic service” means an internet‑based electronic service provided by the Authority for the purposes of these Regulations (even if there are other purposes), the terms of use of which are specified in agreements between the Authority and users of the service (which may take the form of a user guide);

“transferable Government securities” means book‑entry Government securities that are not prohibited under the terms of their issue from being transferred or pledged;

“uniform pricing method” means the manner of allotting transferable Government securities or Treasury Bills set out in regulation 14;

“yield” means the rate of return on any Government security or Treasury Bill computed based on —

(a) the price of the Government security or Treasury Bill;

(b) the total interest payments (if applicable); and

(c) the period commencing from the date of issue of the Government security or Treasury Bill to its maturity date.

Methods of issue

3.  Government securities or Treasury Bills may be issued —

(a) in the case of transferable Government securities —

(i) after conducting an auction in accordance with Division 2 of Part 3, and Part 6; or

(ii) by syndication in accordance with Parts 4 and 6;

(b) in the case of non-transferable Government securities — by a quantity ceiling method in accordance with Division 3 of Part 3, and Part 6; or

(c) in the case of Treasury Bills — after conducting an auction in accordance with Division 2 of Part 3, and Part 6.

PART 2

APPLICATIONS FOR GOVERNMENT SECURITIES AND TREASURY BILLS

How to make application upon public notice

4.—(1)  An application pursuant to a public notice has to be made as follows:

(a) by using the relevant electronic service, subject to paragraph (3);

(b) by an alternative method allowed by the Authority, either generally or specified in the public notice.

(2)  Each application by an alternative method mentioned in paragraph (1)(b) must be accompanied by an administrative fee of $10.70 (inclusive of the goods and services tax chargeable under the Goods and Services Tax Act 1993).

(3)  In the event of a malfunction or failure, or an imminent malfunction or failure, of the relevant electronic service in paragraph (1)(a), an application pursuant to a public notice has to be made in writing and according to the user guide for the relevant electronic service.

Who can make application

5.—(1)  An application pursuant to a public notice has to be made —

(a) where an applicant is not a primary dealer — on behalf of the applicant by an agent who is a primary dealer; or

(b) where an applicant is a primary dealer — by the primary dealer, which must be made distinct and separate from any application in sub‑paragraph (a).

(2)  However, a primary dealer is not eligible to apply for any non‑transferable Government securities pursuant to a public notice except as an agent on behalf of another who is not a primary dealer.

(3)  Where a primary dealer makes applications under paragraph (1)(a) on behalf of 2 or more other persons, the applications must be kept distinct from each other and submitted separately to the Authority.

(4)  Where a primary dealer makes both an application to purchase transferable Government securities or Treasury Bills under paragraph (1)(a) on behalf of another person and an application under paragraph (1)(b) to purchase those transferable Government securities or Treasury Bills for itself, the applications must be kept distinct and submitted separately to the Authority.

Competitive and non-competitive applications for transferable Government securities or Treasury Bills

6.—(1)  A person who intends to purchase transferable Government securities or Treasury Bills pursuant to a public notice may make an application to purchase those transferable Government securities or Treasury Bills on a competitive basis or on a non‑competitive basis in accordance with the terms of the issue of those transferable Government securities or Treasury Bills.

(2)  All applications pursuant to a public notice made on a competitive basis —

(a) must be expressed as a bid yield not exceeding 2 decimal places;

(b) must not be less than the minimum nominal amount of $1,000; and

(c) must be made in multiples of $1,000.

Application for non-transferable Government securities

7.—(1)  A person who intends to purchase non‑transferable Government securities pursuant to a public notice may make an application to purchase those non‑transferable Government securities in accordance with the terms of the issue.

(2)  All applications to purchase non‑transferable Government securities pursuant to a public notice —

(a) must not be less than the minimum nominal amount of $500; and

(b) must be made in multiples of $500.

Cut-off time for applications

8.—(1)  All applications pursuant to a public notice must be made and received by the Authority not later than the time specified in that public notice (called in this regulation the cut‑off time) on the allotment day or auction day specified in the public notice.

(2)  The Authority must refuse to accept any application pursuant to a public notice that is received by the Authority after the cut‑off time.

(3)  The Authority may, in the event of —

(a) any malfunction or failure, or an imminent malfunction or failure, of the relevant electronic service; or

(b) any fire, serious violence, public disorder, epidemic or other incident obstructing, disrupting or seriously affecting the proper conduct of the auction,

extend the date and time for making and accepting applications pursuant to that public notice, and any reference to the auction day or allotment day or cut‑off time in paragraph (1) or (2) is then a reference to that date or time as so extended.

Cancellation of auction or allotment

9.  The Authority may, at any time after the issue of a public notice, cancel the auction or allotment specified in the public notice, in which event the Authority must, as soon as possible, publish a notice to the general public of the cancellation in a manner as will secure adequate publicity for the fact of cancelling that auction or allotment.

Variation in amount of Government securities or Treasury Bills to be allotted

10.—(1)  Where the Authority has issued a public notice, it may at any time during the period starting on the date of issue of the public notice and ending at the cut‑off time of the auction day or allotment day specified in the public notice, vary the amount of Government securities or Treasury Bills specified in the public notice to be made available for allotment, in which event the Authority must, as soon as possible, publish a notice to the general public of the variation in a manner as will secure adequate publicity for the fact of the variation.

(2)  To avoid doubt, a variation under paragraph (1) does not affect the validity of any application to purchase Government securities or Treasury Bills made pursuant to the public notice and before the variation.

PART 3

ALLOTMENT OF GOVERNMENT SECURITIES AND TREASURY BILLS

Division 1 — General

Limits on allotment

11.  In respect of any issue of transferable Government securities or Treasury Bills —

(a) each primary dealer applying on a non‑competitive basis to purchase the transferable Government securities or Treasury Bills on its own behalf must not be allotted more than 1% of the issue;

(b) each person, other than a primary dealer, applying on a non‑competitive basis to purchase the transferable Government securities or Treasury Bills must not be allotted more than —

(i) where the maturity date is one year or less — $1 million; or

(ii) where the maturity date is more than one year — $2 million;

(c) not more than 40% of the issue must be allotted by the Authority to applications made on a non‑competitive basis; and

(d) despite any other provision in these Regulations —

(i) each primary dealer must not be allotted more than 30% of the issue; and

(ii) each person, other than a primary dealer, must not be allotted more than 15% of the issue.

Methods of allotment

12.—(1)  The Authority may allot Government securities or Treasury Bills upon an application pursuant to a public notice —

(a) in the case of transferable Government securities or Treasury Bills — under a multiple pricing method or a uniform pricing method; or

(b) in the case of non-transferable Government securities — under a quantity ceiling method.

(2)  The method of allotment of any Government security or Treasury Bill must be specified in the public notice for the issue of that Government security or Treasury Bill.

Division 2 — Allotment of transferable Government securities or Treasury Bills

Allotment under multiple pricing method

13.—(1)  Subject to these Regulations, transferable Government securities or Treasury Bills that are to be allotted under a multiple pricing method must be allotted in accordance with paragraphs (2) to (9).

(2)  For every issue of transferable Government securities or Treasury Bills in a public notice, the transferable Government securities or Treasury Bills must be allotted to applications pursuant to the public notice made on a non‑competitive basis in priority to all applications pursuant to that public notice made on a competitive basis.

(3)  Where there are insufficient transferable Government securities or Treasury Bills in an issue to allot in full in accordance with paragraph (2), the transferable Government securities or Treasury Bills available for allotment have to be allotted to the applications made on a non‑competitive basis rateably in proportion to the amounts applied for by the respective applicants.

(4)  For any issue of transferable Government securities or Treasury Bills in a public notice, after allotment in accordance with paragraph (2) or (3), the balance of transferable Government securities or Treasury Bills must be allotted to applications pursuant to the public notice made on a competitive basis, in ascending order, starting from the application expressing the lowest bid yield to the application expressing the highest bid yield.

(5)  Where there are insufficient transferable Government securities or Treasury Bills in an issue to allot in full in accordance with paragraph (4), the transferable Government securities or Treasury Bills available must be allotted as follows:

(a) allot the amount available for allotment to the applications pursuant to the public notice made on a competitive basis, subject to sub‑paragraphs (b) and (c);

(b) allot according to the respective amounts in each application pursuant to the public notice made on a competitive basis, subject to sub‑paragraph (c);

(c) where 2 or more applications made on a competitive basis express the same bid yield, allot rateably in proportion to the amounts applied for by the respective applicants.

(6)  The yield for each successful application made on a non‑competitive basis is equal to the weighted average of the bid yields in the successful applications made on a competitive basis.

(7)  The yield for each successful application made on a competitive basis is the bid yield in the application.

(8)  Where any application for Treasury Bills issued in a public notice may only be made on a competitive basis in accordance with the terms of the issue —

(a) paragraphs (2) and (3) do not apply; and

(b) the Treasury Bills must be allotted in accordance with paragraphs (4) and (5).

(9)  For the purpose of paragraph (8), the reference in paragraph (4) to the balance of Treasury Bills is a reference to the Treasury Bills to be issued as specified in the public notice.

Allotment under uniform pricing method

14.—(1)  Subject to these Regulations, transferable Government securities or Treasury Bills that are to be allotted under a uniform pricing method must be allotted in accordance with paragraphs (2) to (8).

(2)  For every issue of transferable Government securities or Treasury Bills in a public notice, the transferable Government securities or Treasury Bills must be allotted to applications pursuant to the public notice made on a non‑competitive basis in priority to all applications pursuant to that public notice made on a competitive basis.

(3)  Where there are insufficient transferable Government securities or Treasury Bills in an issue to allot in full in accordance with paragraph (2), the transferable Government securities or Treasury Bills available for allotment have to be allotted to the applications made on a non‑competitive basis rateably in proportion to the amounts applied for by the respective applicants.

(4)  For any issue of transferable Government securities or Treasury Bills in a public notice, after allotment in accordance with paragraph (2) or (3), the balance of transferable Government securities or Treasury Bills must be allotted to applications pursuant to the public notice made on a competitive basis, in ascending order, starting from the application expressing the lowest bid yield to the application expressing the highest bid yield.

(5)  Where there are insufficient transferable Government securities or Treasury Bills in an issue to allot in full in accordance with paragraph (4), the transferable Government securities or Treasury Bills available must be allotted as follows:

(a) allot the amount available for allotment to the applications pursuant to the public notice made on a competitive basis, subject to sub‑paragraphs (b) and (c);

(b) allot according to the respective amounts in each application pursuant to the public notice made on a competitive basis, subject to sub‑paragraph (c);

(c) where 2 or more applications made on a competitive basis express the same bid yield, allot rateably in proportion to the amounts applied for by the respective applicants.

(6)  The yield for each successful application pursuant to a public notice, whether made on a competitive or non‑competitive basis, is the highest bid yield in any successful application pursuant to that public notice made on a competitive basis.

(7)  Where any application for Treasury Bills issued in a public notice may only be made on a competitive basis in accordance with the terms of the issue —

(a) paragraphs (2) and (3) do not apply; and

(b) the Treasury Bills must be allotted in accordance with paragraphs (4) and (5).

(8)  For the purpose of paragraph (7), the reference in paragraph (4) to the balance of Treasury Bills is a reference to the Treasury Bills to be issued as specified in the public notice.

Division 3 — Allotment of non‑transferable Government securities

Allotment under quantity ceiling method

15.—(1)  Non-transferable Government securities must be allotted under a quantity ceiling method in accordance with paragraphs (2), (3) and (4).

(2)  Where the proposed value of an issue of non‑transferable Government securities is equal to or greater than the total value of all applications for that issue —

(a) all applicants must be allotted the full number of non‑transferable Government securities that they have applied for; and

(b) the total value of the non-transferable Government securities to be issued must be equal to the total value of all applications for the issue.

(3)  Where the proposed value of an issue is less than the total value of all applications for that issue, and the proposed value is insufficient to fulfil the first $500 in value of each applicant’s application, equal proportions must be randomly allotted among all outstanding applications.

(4)  Where the proposed value of an issue is less than the total value of all applications for that issue, and the proposed value is sufficient to fulfil the first $500 in value of each applicant’s application, equal proportions must be allotted among the first $500 in value of each application, and where the balance of the proposed value —

(a) is insufficient to fulfil the next $500 in value of each applicant’s outstanding application, equal proportions must be randomly allotted among all outstanding applications; or

(b) is sufficient to fulfil the next $500 in value of each applicant’s outstanding application (called the relevant value), equal proportions must be allotted among the relevant value of each outstanding application and so on, until the balance of the proposed value is insufficient to fulfil all outstanding applications, in which case equal proportions must be randomly allotted among all outstanding applications.

(5)  For the purpose of paragraphs (2), (3) and (4), where an applicant has made more than one application to purchase non‑transferable Government securities pursuant to an issue, the value of each of the application must be aggregated in determining the value of the applicant’s application in relation to that issue.

(6)  In this regulation —

“equal proportions” means non-transferable Government securities in equal proportions of $500 in value;

“proposed value”, in relation to an issue, means the proposed maximum value of the non‑transferable Government securities to be issued, as announced by the Authority on the Internet or in a local English language daily newspaper;

“randomly allotted”, in relation to an issue, means the random allotment of non‑transferable Government securities among all outstanding applications until all non‑transferable Government securities for that issue have been allotted.

Division 4 — Notification of successful application

Notification of successful application

16.—(1)  The Authority must notify every successful applicant who is a primary dealer.

(2)  Where a successful applicant is not a primary dealer, the Authority must give the primary dealer which had submitted the application on behalf of the successful applicant, a notification specifying the particulars of allotment of Government securities or Treasury Bills to the successful applicant.

(3)  On receipt of a notification under paragraph (2), the primary dealer concerned must without delay inform the successful applicant of the particulars specified in the notification.

 

Made on 6 March 2023.

TAN CHING YEE

Permanent Secretary,
Ministry of Finance,
Singapore.

[AG(S) 0013/21; AG/LEGIS/SL/121A/2020/1 Vol. 1]