The objectives of the agreements are twofold: Firstly, ensure competitive bidding at Treasury bill auctions and secondly increase the liquidity of Treasury bills in the secondary market. Finally the agreement will strengthen the Treasury bills as a benchmark for other money market instruments.
were allowed to bid. Offers were accepted from the three bidders that offered the lowest fee. NDMA will pay a 0,39% commission to the primary dealers based on the nominal value of accepted bids in Treasury Bill auctions.
The main obligations and rights of each Primary Dealer are:
- Primary market: Primary Dealer must buy on average T-bills for 1,000 millions of krona in each of the fortcoming six auctions. Auctions with issues of 7 month T-bills will be held every second month, however the first auction will be held on the 16th of May. The offered volume at each auction is 3-4 billion krona and there will be no reopening of series. Only Primary Dealers are allowed to submit bids at Treasury bill auctions. Non-competitive bids are not allowed. All bids are submitted electronically in Bloomberg.
- Secondary market: Primary Dealers are obliged to submit bid and offers for 100 millions krona in each series. On transaction, they must renew their offer within ten minutes until total transacted daily volume reaches 400 million krona in each series.Maximum spread between the buying and selling offers is set at 0,03% in terms of price.
