To

All Banks/Primary Dealers

Dear Sirs / Madam,

Acceptance of Bids on Pro-rata Volume Basis

In order to further streamline the auction process of Government Securities (Market Treasury Bills and Pakistan Investment Bonds) and Open Market Operations, SBP has decided to introduce the following changes:

1. Henceforth, SBP will have the discretion to accept bids submitted in auctions of Government Securities (Market Treasury Bills and Pakistan Investment Bonds) and Open Market Operations on a ‘pro-rata volume’ basis.
2. If the amount of bids submitted up to the cut-off price / yield in a particular tenor is more than the amount required by SBP; then SBP at its discretion, can accept an amount lower than the total amount offered at the cut-off.
3. In case SBP decides to accept bids on a pro-rata volume basis, Banks / PDs will be allocated an amount equivalent to their proportion in the total bids submitted at the given cut-off yield / price.
4. Amounts allocated to Banks / PDs on pro-rata volume basis will be rounded off to the nearest Rs. 50 million (face value).
5. The pro-rata rule will not be applicable on any bid equal to or less than Rs. 50 million (face value). In such an instance, Bank / PD will be allocated 100% of the bid amount.
6. An example to illustrate the new procedure is annexed herewith.

Other instructions on the subject shall remain unchanged.