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.
Annex: