Start of nonrestricted trading of gov’t securities postponed

The Bureau of the Treasury (BTr) has again pushed back the start of the non-restricted trading of government securities, this time moving the live date to Feb. 2, 2015 instead of early January.

In a BTr memorandum dated Dec. 23, National Treasurer Rosalia V. de Leon said the postponement was made “[t]o conclude market preparedness activities leading to the full implementation” of nonrestricted trading and settlement for peso-denominated, coupon-bearing government securities.

“A detailed schedule of activities will be issued separately by the [BTr] for market participants’ compliance,” the memo further read.

In a text message on Friday, De Leon explained that the postponement came on the back of some “processes that are taking some time for banks to comply.”

“At the same time, we would like to perform additional market testing to ensure smooth implementation of nonrestricted environment,” she added.

Last November, the BTr moved to Jan. 5 from the initial schedule of Nov. 24 the initiative that will allow government securities to trade between various entities, regardless of their tax category or classification, in any accredited government securities trading market.

Under the Department of Finance’s latest amendment to Department Order (DO) No. 141-95 via DO 068-2014 issued last August, transfers between market participants will be allowed regardless of tax status, hence will allow tax-exempt institutions to trade in the debt market.

The BTr noted that DO 141-95 issued almost 20 years ago had “restricted the transfers of securities between taxable and tax-exempt institutions, effectively segmenting the government securities market along these tax categories.”

Meanwhile, a separate memorandum also issued by the BTr early this week urged government securities eligible dealers (GSED) to open a so-called “Dealer Omnibus SATT,” which would “facilitate settlement of trades with taxable offshore institutional clients.”