Changes to Government of Canada auction process to take effect 14 October 1998

On behalf of the Minister of Finance, the Bank of Canada announced today that "Revised rules pertaining to auctions of Government of Canada securities and the Bank of Canada\'s surveillance of the auction process," released 11 August 1998, will take effect on 14 October 1998.

Revisions to the auction rules, affecting the primary market in Government of Canada securities, were developed in extensive consultation with market participants. These changes are designed to reinforce the integrity of the auction process and to encourage broad participation in it. The Investment Dealers Association, in consultation with the government, has developed a code of conduct—IDA Policy No. 5—to reinforce the integrity of the secondary market. These initiatives are linked through the new terms of participation in auctions for government securities distributors and for customers.

Under the new rules, there will be 25 government securities distributors, including 15 primary dealers, eligible to submit bids directly in auctions of Government of Canada securities.

Coincident with the implementation of the new auction rules, the Bank of Canada will introduce a new system, the Communications, Auctions and Reporting System (CARS). This system will be used for tendering and processing Government of Canada treasury bill, bond, and Receiver General Term Deposit auctions.

Copies of the revised rules, the terms of participation, and applications for customer bidding identification numbers are available on the Bank of Canada's Web site, or from Bank of Canada Publications Distribution at (613) 782-8248. IDA Policy No. 5 is also available on the Bank of Canada's Web site.