Iceland’s Government Debt Management to sign treasury securities agreements
14 March 2019 Reykjavik
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The Government Debt Management within the Central Bank of Iceland will conclude agreements concerning the issuance of treasury securities and market making in the secondary market.
The task was assigned by the Minister of Finance, and a sample has been released by the Government Debt Management.
Financial entities in Iceland that have been granted an operating license pursuant to clause 1-2 in the first paragraph of article 4 in Act No.161/2002 on financial undertakings have equity of a minimum of €10 million.
In addition, they are equipped to participate in auctions of treasury securities, are invited to become parties to such agreements.
Meanwhile, primary dealers have the exclusive right to submit bids at the auctions, where marketable treasury securities are offered for purchase or sale.
They will also have access to securities lending according to terms and rules.
Primary dealers will act as market makers for benchmark series of treasury securities.
Additionally, primary dealers are obliged to submit a given minimum amount of bid and ask quotes for each benchmark series of treasury bonds in accordance with the maximum spread specified in the agreements.
In article 7 of the Sample, it was outlined that, “the primary dealer authorises the Central Bank to directly debit its accounts no. X and no. X, at the Central Bank for all transactions related to auctions and securities lending”.
It was further noted that “any settlement of business related to auctions and securities lending, including but not limited to all costs and fees. The primary dealer is obliged to have
sufficient funds available on its business accounts”.
According to article 10 on the sample, it was also cited that, “primary dealers have access to special service such as securities lending facilities provided by the Central Bank.”
“The central bank sets rules concerning securities lending facilities provided to primary dealers that parties of this contract shall obey.”
The task was assigned by the Minister of Finance, and a sample has been released by the Government Debt Management.
Financial entities in Iceland that have been granted an operating license pursuant to clause 1-2 in the first paragraph of article 4 in Act No.161/2002 on financial undertakings have equity of a minimum of €10 million.
In addition, they are equipped to participate in auctions of treasury securities, are invited to become parties to such agreements.
Meanwhile, primary dealers have the exclusive right to submit bids at the auctions, where marketable treasury securities are offered for purchase or sale.
They will also have access to securities lending according to terms and rules.
Primary dealers will act as market makers for benchmark series of treasury securities.
Additionally, primary dealers are obliged to submit a given minimum amount of bid and ask quotes for each benchmark series of treasury bonds in accordance with the maximum spread specified in the agreements.
In article 7 of the Sample, it was outlined that, “the primary dealer authorises the Central Bank to directly debit its accounts no. X and no. X, at the Central Bank for all transactions related to auctions and securities lending”.
It was further noted that “any settlement of business related to auctions and securities lending, including but not limited to all costs and fees. The primary dealer is obliged to have
sufficient funds available on its business accounts”.
According to article 10 on the sample, it was also cited that, “primary dealers have access to special service such as securities lending facilities provided by the Central Bank.”
“The central bank sets rules concerning securities lending facilities provided to primary dealers that parties of this contract shall obey.”
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