Temporary changes to the Government of Canada securities auction

The Bank of Canada today announced temporary changes to standard terms for auctions of Government of Canada securities to support the liquidity and well-functioning of financial markets. These terms will be temporarily amended as follows:

BIDDING LIMITS: To support auction coverage, the maximum share of an auction that all Primary Dealer (PD) will be able to submit on a competitive basis will increase to 40 per cent and the aggregate limit—which includes bids submitted on behalf of customers— will be increased from 40 to 50 per cent. PD Net Position Report (NPR) will permit 40 per cent, in order to align with the auction limit increase. It is important to note that minimum bidding requirements remain unchanged at 50 per cent of the PD’s formula calculation, which takes into account market shares in the primary and secondary Government of Canada securities markets.

BIDDING RANGES: Given challenges in trading in volatile market conditions, the maximum price range within which PDs must meet their minimum level of bidding obligations will increase from 10 to 20 basis point from the highest yield accepted.

These temporary changes apply to auctions of Treasury bills, nominal bonds and real return bonds and will remain in effect until further notice.

Changes effective: April 13, 2020

For further information, please contact:

Mervin Merkowsky
Director
Funds Management and Banking Department
Bank of Canada
613-782-8265

James Wu
Senior Director
Funds Management Division
Department of Finance Canada
613-369-3898

Media:

Media Relations
Bank of Canada
613-782-8782