13 July 2005
TENDER ARRANGEMENTS FOR THE ISSUE OF COMMONWEALTH GOVERNMENT SECURITIES
The Australian Office of Financial Management (AOFM) has reviewed arrangements for the conduct of tenders for the issue of Commonwealth Government Securities (CGS). The review included consultation with firms that are regular participants in CGS tenders.
Following the review and after consultation with the Reserve Bank of Australia (RBA) it has been decided to shorten the period between the closing time for submitting tender bids and announcement of tender results. It has also been decided to conduct a tender for a new electronic system for the collection and processing of CGS tender bids. The changes are aimed at further enhancing arrangements for the issue of CGS and ensuring the Australian Government continues to issue CGS on the best possible terms. Further details are provided below.
Speed of tender result announcements
Currently the closing time for bids in CGS tenders is 12:15 pm on the day of a tender, with results announced thirty minutes later i.e. 12:45 pm. In future results for CGS tenders will be announced as soon as practicable after the close of bidding.
- It is expected that tender results will normally be announced within fifteen minutes of the close of bidding.
- There will be no change to the closing time for bids.
- This arrangement is expected to be implemented for the first time with the Treasury bond tender currently scheduled for 26 July 2005.
Acquisition of new electronic tender system
CGS tenders are currently conducted by the RBA on behalf of the AOFM. Bids are submitted via the Reserve Bank Information and Transfer System (RITS). Only institutions that are members of RITS may lodge bids.
The AOFM is planning to conduct an open tender for procurement of a new electronic system for the collection and processing of CGS tender bids. A new system is expected to provide scope to further improve CGS tender arrangements, including a further reduction in the period between the closing time for tender bids and announcement of the results.
- It is expected that a request for tender for this procurement will be issued towards the end of 2005.