In order to bring more efficiency, State Bank of Pakistan has decided to automate the auction process of Market Treasury Bills and Pakistan Investment Bonds through Bloomberg auction module. Auction of MTBs and PIBs will be conducted online under Bloomberg ticker AUPD according to following instructions and guidelines:

1. Competitive Auctions

a. Effective February 20, 2013, the manual process of submitting the sealed auction bid letters will be discontinued.

b. Primary Dealers will be required to submit bids through online auction system during the stipulated time period.

c. The auction module is integrated with SBP systems; therefore, the entire auction process, from bidding to settlement, has been fully automated.

d. The online auction module, along with the integration, has been extensively tested with PDs in parallel with manual auctions.

2. Non Competitive Bids

a. Effective February 19, 2013, Non Competitive Bids shall also be submitted online one day before the competitive auction day during the stipulated time period.

b. PDs must input client name in Block Letters in Account fields available in online auction system.

c. The PDs will continue to submit the copies of clients’ letters, along with their original covering letters, at SBP counter within one hour after close of online NCB bidding.

3. Other Auction Details

a. SBP, two days before the competitive auction day, w.e.f February 18, 2013, will setup the Auction page on AUPD for both the Competitive Auction and the Non Competitive Auction, which will include all the relevant details.

b. No change in Bids will be allowed after the closure of bidding time.

c. Primary Dealers are required to keep a high speed internet connection as backup in case the primary internet connection is not available for Bloomberg services due to technical or any other reason.

d. In case, the backup internet also fails. Primary Dealer shall approach SBP, before auction close time, with sealed bid letters, along with an authority letter, requesting SBP to incorporate bids in the competitive auction.

e. If there is a city/country wide internet connectivity issue, SBP at its discretion may cancel online submission of bids and require PDs to submit sealed bid letters at SBP counter. In this regard, all PDs will be informed accordingly on Reuter’s page SBPK23 and Bloomberg’s page 14 of SBPK1.

f. Bid report of auction will be available on SBP website after announcement of auction result.

Other instructions on the subject shall, however, remain unchanged.

Please acknowledge receipt.