Treasury resets nonrestricted trade of gov’t securities

The Bureau of the Treasury (BTr) has postponed to early next year the implementation of nonrestricted trading and settlement for peso-denominated coupon-bearing government securities, citing “operational concerns” that still need to be addressed.

“In recognition of the market community’s request to complete activities towards market education, systems preparedness, addressing operational concerns and other preparatory activities for a smooth transition to nonrestricted trading and settlement environment, the target live date for the implementation of the initiative is moved to Jan. 5, 2015,” according to a BTr memorandum dated Nov. 20 and signed by National Treasurer Rosalia V. de Leon.

In the memo, the BTr likewise urged government securities eligible dealers, broker institutions, tax-exempt institutions and other market participants to “expedite the processing of documentary requirements for setting up the requisite accounts/investor codes and complete preparatory activities by Dec. 15, 2014.”

The previous deadline was Nov. 21.

Last Tuesday, de Leon told reporters that the unrestricted trading of government securities would begin on Nov. 24.

“We have settled all issues, even on tax tracking. The infrastructure is in place. We’re ready to go live,” she said in an interview after the treasury bond auction on Nov. 18.

But in a text message yesterday, de Leon explained that “the reschedule is primarily in response to the market’s call for more time to ensure all investors are prepared to go live.”

Banks want to make sure their client-investors “are fully informed of the mechanics and operations of the nonrestricted trading,” she said.

De Leon maintained that the postponement was “merely to address operational concerns, and not legal in nature.”

Under the Department of Finance’s latest amendment to Department Order (DO) No. 141-95 via DO 068-2014 issued in August, government securities are now allowed to trade between various entities, regardless of their tax category or classification, in any BTr-accredited government securities trading market.