How Auctions Are Conducted
SGS bonds, T-bills, MAS Bills and MAS FRN auctions typically take 3 place business days prior to issuance. You can take part by applying through any of the primary dealers. For auction dates and results, view the issuance calendar.
Who Can Take Part
SGS auctions are open to all institutions and individuals, including non-residents.
MAS may participate in SGS auctions on a non-competitive basis. The SGS purchased is used in money market operations via repos.
Any amount that MAS plan to apply for is announced to the market before each auction. In addition, MAS may increase or decrease the amount it purchases based on the auction safeguard mechanism.
Note: MAS Bills auctions are open to institutional investors only. MAS does not take part in MAS Bills auctions.
How Bidding Works
SGS bonds, T-bills, MAS Bills, and MAS FRN are issued via a uniform-price auction. You will need to decide whether to submit a non-competitive pr competitive bid at an auction before you buy.
Note: Competitive and non-competitive bids are accepted for SGS bonds and T-bill auctions, and only competitive bids are accepted for MAS Bill and MAS FRN auctions. Non-competitive bids will be allotted first. The balance of the issue amount will be awarded to competitive tenders from the lowest to highest yields.
Non-competitive Bid (SGS bonds, T-Bills)
In a non-competitive bid, you only specify the amount you want to invest, not the yield. Choose this if you wish to invest in the bond regardless of the return or are unsure of what yield to build.
You will get the bond at the cut-off yield, which is highest accepted yield of successful competitive bids.
All non-competitive bids are allotted in full, subject to the allocation limits. The total non-competitive allotment is:
- Limited to 40% of the issuer on offer.
- Pro-rated if the total application amounts exceed this limit.
Competitive Bid (SGS bonds, T-Bills, MAS Bill and MAS FRN)
If you wish to invest in the bond only if it yields above a certain level, submit a competitive bid. You can specify the yield you are willing to accept in percentage terms, up to 2 decimal places.
You may not get the full amount that you applied for, depending on how your bid compares to the cut-off yield. After non-competitive bids are allotted, the balance amount is allotted to competitive bids from the lowest to highest yields.
There is no limit to the number of competitive bids you can submit.
Note: A lower yield represents a more competitive bid, as you are indicating that you will accept a lower interest rate. You can submit multiple competitive bids.
Allotment Limits
The maximum SGS and T-bills allotments for primary dealers and non-primary dealers are as follows:
| Type of dealer | Competitive bids1 | Non-competitive bids |
|---|---|---|
| Primary dealer | 30%
|
1%2 |
|
Non-primary dealer |
15% |
S$2 million per bond application; |
[1] The maximum auction allocation limit is also 30% and 15% for primary dealers and non-primary dealers, respectively. This includes the allocation under competitive and non-competitive bids.
[2] The 1% limit applies to the primary dealers. If a primary dealer enters a bid on behalf of a client, the client is subject to the non-primary dealer limit of S$2 million per bond application.
Note: Allotment limits is not imposed on MAS Bill auctions
Auction Safeguard for SGS auctions
Although SGS auctions are fully underwritten by primary dealers, the SGS market is not immune from global developments.
The auction safeguard mechanism allows MAS to vary its subscription amount to offset unexpected changes in investor demand. This makes the SGS auction system more resilient.
How It Works
The auction safeguard mechanism takes place when the auction cut-off yield is more that 25 basis points below or above the market yield.
If that happens, MAS may subscribe for a lower amount in an unexpectedly strong auction, or a higher amount in an unexpectedly weak auction.
The auction safeguard thus helps to lower the risk of volatility or disorderly adjustment in the secondary SGS and broader Singapore dollar corporate debt markets.