BANK OF GHANA
GUIDELINES FOR THE
GOVERNMENT SECURITIES MARKET
FOR PRIMARY DEALERS
Operational Guidelines for Government Securities
for Primary Dealers
April 2011
TABLE OF CONTENTS
Page
Introduction
Government Securities
Wholesale Auction
A
Introduction
B
Auction Guidelines
1. Eligibility
2. Available Financial Instruments
3. Application Procedure
4. New Products
5. Pricing and Allotment
5.1
Competitive Bids
5.2
Non-competitive bids
6. Notification of results and settlement
7. Payment and settlement
8. Underwriting commitments
9. Registration of Applicants
10. Settlement Defaults
11. Redemption on Maturity
12. Commissions / Charges
13. Miscellaneous
Secondary Market
17
a.
b.
c.
Market Share
Market making procedure
Outright transactions
i. Dealing Practice
ii. Price quotation
iii. Market lot transactions
iv. Value date
v.
Business hours
vi. Confirmation of deals
vii. Settlement
General Default
Organizational Structure
Abbreviations
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for Primary Dealers
April 2011
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2
GUIDELINES FOR THE
GOVERNMENT SECURITIES MARKET
INTRODUCTION
Bank of Ghana introduced the weekly treasury bills tender in 1987. The tender
was opened to banks, discount houses and the public at large, although the
public had to submit their applications through the banks. The tender was
operated side by side with the tap sales where customers could purchase bills
directly from Bank of Ghana.
A fully-fledged money market was established in Ghana in 1992 when the Bank
of Ghana abolished all direct controls of monetary management and started to
rely primarily on OMO to transmit monetary policy.
Although significant progress has been made in the development of money
markets in Ghana, the market is still evolving. Bank of Ghana has initiated moves
to broaden the market and limit access to rediscounting at the Bank. This is with
the view to develop a vibrant secondary market in Government securities. The
Listing of Government Securities, especially the medium and long-term
instruments, is a further effort to facilitate secondary market activity and improve
upon the liquidity of government securities.
The Bank of Ghana introduced the Central Securities Depository in November
2004 to further enhance the book entry system of registering holdings and to reenforce the non-issue of certificates for Government securities
GOVERNMENT SECURITIES
Bank of Ghana on behalf of the Government of Ghana issues all Government
securities. The Bank may also issue securities in its own name for its Open
Market Operations. All these securities are issued at the primary market through
the wholesale auction process.
Operational Guidelines for Government Securities
for Primary Dealers
April 2011
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i.
Government Securities
Government securities (bills, bonds) constitute direct, unsecured and
unconditional obligations of the Government. The principal of and discount /
interest on Government securities will be a charge on the Consolidated Fund.
Government securities sold in the primary market in Ghana, all of which can be
traded in the secondary market, include the following:-
91-day Treasury Bill,
182-day Treasury Bill,
1-year Treasury Note,
2-year Treasury Note,
3-year Medium Term Bond, and
5-year Medium Term Bond.
and any other securities that may be issued.
The securities are issued for the financing of Government cash shortfalls and
to redeem maturing securities. Government Securities are also issued for
the development of the financial market by providing risk-free
benchmark securities as reference for the issue of debt instruments in
the money and capital market by corporates and non-government
institutions.
ii
Bank of Ghana Bills
These include the present Bank of Ghana Bills of 1 week, 2-week, 28-day (1
month) and 56-day (2 months) maturities and others that may be issued in
future for OMO purposes.
Bank of Ghana issues these securities in its Open Market Operations (OMO)
for market liquidity management.
iii
Currency
Securities under these guidelines will be denominated in the local currency
Ghana Cedis (GH¢). All payments in respect of subscription and redemption
will be made in Ghana Cedis.
Operational Guidelines for Government Securities
for Primary Dealers
April 2011
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WHOLESALE AUCTION
A. INTRODUCTION
The Wholesale Auction, introduced on March 1, 1996, is intended to help achieve
the development of the secondary market.
Selected financial institutions have been permitted to participate in the periodic
wholesale auction. Each is designated as a Primary Dealer (PD). PDs can
participate in the primary auction as principal for their own accounts and/or as
agents on behalf of their customers.
The auction is intended to increase competition among dealers and thereby
contribute to a more efficient, dynamic and vibrant secondary market. Individuals
and other firms and institutions are expected to obtain their requirements from the
dealers.
B. AUCTION GUIDELINES
1.0
Eligibility
a. Only financial institutions authorized by Bank of Ghana shall be eligible
to participate in the wholesale auction for Government of Ghana and
Bank of Ghana securities.
b. For the purposes of these guidelines, financial institutions so
authorized shall be referred to as "PRIMARY DEALERS" (PDS).
2.0
Available Financial Instruments
a. The Ministry of Finance through BOG shall publish an annual
calendar for the issuance of Government securities for a calendar
year not later than 15th day of December of the preceding year. The
calendar so published would be reviewed every quarter of the year.
b. Based on the published calendar, Bank of Ghana shall announce
periodically but not less than a week before an auction, the
amounts and specific details of the financial instruments available at
the next auction and their maturity profiles.
Operational Guidelines for Government Securities
for Primary Dealers
April 2011
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c. For the issue of medium and longer-term securities, a separate
notice or prospectus shall be placed in the daily newspapers and on
the Bank of Ghana website.
3.0
Application Procedure For Auction
a. An advertisement inviting bids for the securities to be issued shall
be placed in the national dailies and on the Bank of Ghana website
in advance of the auction by Bank of Ghana.
b. For the issuance of Bonds, BoG shall publish a Prospectus, inviting
bids for the Bonds to be issued, in advance of the auction.
c. Auctions for Government Securities (G-Secs) shall make provision
for bids to be made on competitive or non-competitive basis.
d. For its own OMO activities, Bank of Ghana may from time to time
hold additional auctions at short notice. Such auctions will be limited
to primary dealers bidding on their own behalf. PDs may trade
these instruments with non-PD.
e. Each tender application for the purchase of securities shall be
submitted electronically through the CSD auction system by the
PDs to the Public Debt Division, BOG.
f. PDs shall submit bids on the basis of the demand from their
customers and their own requirements.
g. For each security, PDs may quote a single bid rate or a series of bid
rates indicating the amount required at each bid rate. However, no
interest rate shall be submitted for non-competitive bids.
h. Unless otherwise stated in a prospectus in the case of a Bond
issue, Auctions shall be set up on Fridays and made available to all
PDs on the Auction Terminal for the input of bids, same day at
8.30 am. Submission of bids through the auction system ends at
Operational Guidelines for Government Securities
for Primary Dealers
April 2011
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1.00 p.m. on same day, after which time the bidding screen shall be
closed and made unavailable to PDs. (Changes to be made to be in
sync with CSD’s new operational procedures once finalized)
i. The auction shall normally be held on Fridays, between 2:00 p.m.
and 3:00 p.m. However, if Friday happens to be a holiday, the
auction shall be held on the preceding Thursday and submission of
bids shall therefore close at 1:00 p.m. on Thursday or the preceding
working day.
j.
In the case of medium term bond issues open to external investors,
the auction shall normally be held on Thursday, between 2:00 p.m.
and 3:00 p.m. However, if Thursday happens to be a holiday, the
auction shall be held on the preceding Wednesday and submission
of bids shall therefore close at 1:00 p.m. on Wednesday or the
preceding working day.
k.
The BoG may accept or reject or refuse to recognise any or all bids
or tenders. BoG shall not award more Bills/Bonds than the amount
advertised or specified in any Prospectus or notice. The BoG further
reserves the right to waive any provision or provisions of, any
Prospectus, notice or application form for any or all bidders up until
the time a bid is accepted and the price settled.
4.0
New Products
New products refer to non conventional bonds with tenors for which
the last issue date is over two years. BOG shall notify the market at
least three months in advance before such new products are
issued.
Operational Guidelines for Government Securities
for Primary Dealers
April 2011
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5.0
Pricing And Allotment
5.1
Competitive Bids
(a)
Each competitive bid must be for one amount and at a desired price
or interest rate expressed as a percentage. A person may submit
one or more competitive bids at different prices or interest rates.
(b)
Each competitive bid must be for a minimum of GH¢10,000 nominal
of Bonds and for multiples of GH¢1,000. No sale will be made of
an amount less than GH¢1,000 nominal of Bonds.
(c)
Competitive bids for the auction will be ranked in descending order
of price or ascending order of discount / interest rate, Bills / Bonds
will be sold to applicants whose competitive bids are at or above the
lowest price or at or below the highest interest rate at which the
BoG decides that any competitive bid should be accepted (the
"lowest accepted price" or "highest accepted rate").
(d)
In the case of auctions of Conventional Bills, applicants whose
competitive bids are accepted will purchase Bills at the prices or
rates at which they bid where allotments are made by the multiple
price method. Competitive bids which are accepted and which are
made at prices above the lowest accepted price or below the
highest accepted rate will be satisfied in full. Competitive bids which
are accepted and which are made at the lowest accepted price or
highest accepted rate may be satisfied in part only or on pro rata
basis.
(e)
Where allotments are made by the uniform allotment price
method (which shall be restricted to the issue of Bonds), all
successful bidders will purchase the Bonds at that price,
irrespective of the price quoted. Competitive bids which are
accepted and which are made at prices above the uniform allotment
price or rates below the highest accepted rate would be satisfied in
full. Competitive bids which are accepted and which are made at the
uniform allotment price may be satisfied in part only.
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for Primary Dealers
April 2011
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(f)
In making a competitive bid, each bidder represents and undertakes
that it has not discussed its bid, or the bid of anyone else, with any
other person nor, in any other way whatsoever, has it disclosed its
bid to any other person, or had anyone’s bid disclosed to it, nor has
it colluded or sought to collude with any other person as to its own
bid or that of any other person or the pricing of the auction
generally. The foregoing does not relate to any discussions,
instructions or reporting between a Primary Dealer and any third
party solely in relation to the bid that the third party wishes to make
through the agency of the Primary Dealer, provided the Primary
Dealer:
i.
discloses to the BoG that it is bidding as nominee on behalf
of the third party;
ii.
does not discuss or disclose to the third party any bid it is
making on its own behalf or on behalf of another third party
nor does it collude in any way whatsoever with the third party
for the purpose of influencing the pricing of the auction.
(g)
PDs shall submit bids for their proprietary account and for and on
behalf of their clients.
5.2
Non-Competitive Bids
(a)
Only individuals are eligible to submit non-competitive bids. PDs,
Firms, Institutions, and Insurance Companies are not allowed to
submit non-competitive bids.
(b)
Each PD shall make all reasonable effort to inform its individual
clients of the option of submitting a non-competitive bid and to
explain the considerations regarding that choice.
(c)
Individuals may submit no more than one non-competitive bid for
each instrument sold at each auction. Individuals are not allowed to
submit non-competitive bids for the same security through multiple
dealers at the same auction.
Operational Guidelines for Government Securities
for Primary Dealers
April 2011
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(d)
A non-competitive bid must be for not less than GH¢1,000 nominal
of bills/bonds, and must be for multiples of GH¢100 nominal of
securities.
(e)
Only one non-competitive bid may be submitted for the benefit of
any one person (separate bids may be made by Primary
Distributors on behalf of separate individual clients). Multiple
applications or suspected multiple applications will be rejected. Only
one non-competitive bid may be submitted on any one application.
(f)
No more than 20% of the securities on offer will be offered noncompetitively.
(g)
If the total amount of non-competitive bids exceeds 20% of the
auction amount at any auction, Bank of Ghana reserves the right to
pro-rate those non-competitive bids and to allocate to PDs their prorata shares.
(h)
Bids submitted by Bank of Ghana for its own account are not
subject to these limits
(i)
Non-competitive bids, which are accepted, will be allotted in full at
the non-competitive sale price. The non-competitive sale price for
auctions of Conventional bills/bonds will be equal to:
i.
the average of the prices or rates at which competitive bids
have been accepted (under the multiple price system), the
average being weighted by reference to the amount
accepted at each price or each rate and rounded down to the
nearest multiple of GH¢100.
ii.
the uniform allotment price or uniform allotment rate where
allotments are in accordance with the single or uniform
pricing method.
(j)
The non-competitive sale price for auctions of Index Linked Bonds
will be equal to the uniform allotment price or uniform allotment rate
accepted for competitive bids.
(k)
The BoG will bid on a non-competitive basis.
Operational Guidelines for Government Securities 10
for Primary Dealers
April 2011
(l)
CSD will advise each PD of its allotment after each auction.
6.0 Notification of Results
6.1 The detailed results of any auction shall be available from 4.30pm on the
Auction Module available to all PDs on the auction day and in any event
the Primary Dealer and other non-competitive bidders shall be notified
(whether by e-mail or by fax) of their allotments by no later than the end
of the first Business Day following the auction.
6.2 The BoG will publish a detailed report and analysis of each auction in a
press notice and on BOG website by close of business on the first
business day following the auction date. Where appropriate, such reports
and analyses will include:
i. in the case of a Conventional Bills / Bond
a. the highest, average and lowest accepted prices or rates
(with the pro rata allocation of amounts bid for at the lowest
accepted price or highest accepted rate);
b. the gross redemption yields equivalent to those prices or
rates;
c. the total value of accepted non-competitive bids, split
between Primary Dealer and third parties on behalf of whom
they bid; and
d. the ratio of the total value of bids received to the amount on
offer, including bids rejected in whole or in part on account of
price or rate.
e. Volume of bids submitted for the various tenors
f. Range of rates submitted for the various tenors
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for Primary Dealers
April 2011
ii.
in the case of an Index-Linked Bond
a. the uniform allotment price or uniform allotment rate;
b. the pro rata allocation of amounts bid for at such price or
rate;
c. in the case of an Index-Linked Bond issued at a uniform
allotment price, the real yield equivalent to that price (and the
assumption made in calculating the real yield);
d. the total value of accepted non-competitive bids;
e. the allotment split between Primary Dealer and third parties
on behalf of whom they bid; and
f. the ratio of the total value of bids received to the amount on
offer, including bids rejected in whole or in part on account of
price or rate.
g. Applicable index value
7.0
Payment and Settlement
7.1 Unless otherwise announced, the settlement period for primary issues of
Government securities shall be T+1, that is, the first working day after
the auction.
7.2 In the case of medium term bond issues open to external investors,
settlement shall take place not later than two days after the auction to
enable external investors arrange for the domestic currency required for
successful allotments.
7.3 The amount of payment to be effected on settlement day for discount
securities will be calculated on the basis of the actual number of days to
maturity (D), a year of 364 days and the accepted discount rate using the
following formula:
Cost = F(1-D/364 x r/100)
Where F is the Face or Nominal value
D is number of days
r is the accepted discount rate
Operational Guidelines for Government Securities 12
for Primary Dealers
April 2011
7.4 Settlement for of interest bearing securities, settlement shall be at par
unless otherwise stated in the prospectus for the particular issue
7.5 All payments for Government Securities shall be made through the cash
accounts of settlement partners at the BoG. Holders of such accounts
must ensure that they have enough funds in their accounts at the date of
the auction to cover purchases of securities made on their own behalf
and on behalf of their clients.
7.6 PDs shall ensure that they have enough funds in their accounts to cover
purchases made.
7.7 On the issue and settlement Date, the BoG shall:
a.
Debit the BoG Cash Account of the successful bidder by the
amount the bidder is required to pay for the New Bonds; and
b.
Advice the CSD to credit the New Bonds sold to the Securities
Account of successful bidder.
7.8 CSD shall update the Register accordingly.
7.9 The holdings of each Bondholder shall be recorded by electronic book
entry on the Central Securities Depository.
8.0
Underwriting Commitments
8.1
Bank of Ghana may invite PDs to underwrite any unsold securities at the
auction within three working days after the auction, i.e. Monday to
Wednesday.
8.2
The minimum value of securities underwritten shall be GH¢1,000,000 (one
million Ghana Cedis) and multiples of GH¢100,000 (one hundred
thousand Ghana Cedis) thereafter.
8.3
PDs shall be paid the fees as prescribed in the Requirements and
Responsibilities of Primary Dealers in the Government Securities Market
document.
Operational Guidelines for Government Securities 13
for Primary Dealers
April 2011
9.0
Registration of Applicants
9.1
A register of the Government Securities in electronic book entry form shall
be maintained by the Central Securities Depository (CSD). An entry in the
Register of the name of an investor shall constitute prima facie evidence
that the investor is the legal owner of the securities referred to against
his/her name.
9.2
Holders of Government securities shall be registered and have an account
with the CSD. For first time purchasers of Government Securities, the
Primary Dealer will register and obtain a unique identification number and
a securities account number on the CSD for the client.
9.3
Government securities shall only be sold to applicants that have been
registered and hold Securities account with the CSD.
9.4
The Register shall contain the following information:
i.
The Issue Date of the securities;
ii.
The serial numbers of the securities;
iii.
The amount, type and maturity of each security held by each investor
and the date the investor became registered as owner of the security;
iv.
The name and address of the investor; and
v.
Whether the investor is holding the securities as nominee for a
beneficial owner.
9.5
Although the Register shall not be open to the public, the CSD shall meet
all reasonable written requests for information about the securities held by
the investor, on payment to the CSD of a prescribed fee that will be
published.
9.6
The Register shall be closed for the purpose of making payments on
Existing Bonds five (5) Business Days prior to an Interest Payment Date
and the Maturity Date (in each case, the "Record Date"). Accordingly, if
the Bonds are transferred to a new Bondholder after the Record Date but
Operational Guidelines for Government Securities 14
for Primary Dealers
April 2011
before an Interest Payment Date or the Maturity Date, the BoG will make
the payment in question to the person who was the Bondholder as at the
close of business on the Record Date.
9.7
The CSD will act in good faith in maintaining and updating the Register
under this clause, and it shall not be responsible for any losses or liabilities
suffered or incurred by a Bondholder or other member of the public who
relies on information obtained from the Register which is not correct or is
misleading as long as the error was not caused by the CSD.
9.8
In carrying out its duties under clause 10 (Secondary Market) and clause
11, the CSD may rely on a Transaction which appears on its face to be
genuine and to have been duly signed by authorised signatories of the
party or parties to it, or captured in the CSD system by authorised user,
and shall not be liable in any way should it later transpire that the
Transaction was a forgery or that it was not duly authorised by a party.
10.0 Settlement Defaults
10.1
When a person or an entity fails to comply with the requirements of this
Guideline, any Prospectus or notice, the BoG will consider the
circumstances of such failure and determine an appropriate remedy.
Such remedy may include prohibiting the person or entity from
participating in future auctions for its own account, for the account of
others, or both. The BoG may also refer such occurrences to the
appropriate regulatory agency for enforcement action. In determining
whether or not there has been any such failure, the BoG may request,
and investors, bidders and Primary Dealers will supply, such information
as the BoG may reasonably require for its determination. Any such
determination by the BoG shall be conclusive.
10.2
If, notwithstanding a default in making due payment, the BoG accepts
payment after the Issue Date, it may charge interest on the amount
payable in respect of the period from the Issue Date to the date of
payment, at a rate equal to the BoG Prime Rate plus 2% per annum.
Operational Guidelines for Government Securities 15
for Primary Dealers
April 2011
11.0
Redemption on Maturity
1. Proceeds of securities purchased and/or those underwritten at auction
shall be paid on maturity to the account of the PDs.
12.0
Commission/Charges/Brokerage Fees
1. Brokerage fees will be paid to the PDs acting on behalf of clients at the
auction as prescribed in the Requirements and Responsibilities of Primary
Dealers in the Government Securities Market document.
2. PDs submitting orders on behalf of clients at an auction should therefore
not levy any charge for such a service.
3. For instruments listed on the Ghana Stock Exchange (GSE),
commission or fees regarding secondary market transactions will be in
accordance with the rules of the GSE
13.0
Miscellaneous Rules and Procedures
1.
Bids once submitted to Bank of Ghana, may not be withdrawn.
2.
Inadequately completed bids shall not be eligible for the auction
3.
Bank of Ghana shall publish weekly reports and analysis of the
auctions, giving details of:
i.
the range and amount of bids received,
ii.
the range and weighted average discount
and/or
interest
rate of successful bids for each security,
iii.
the amount of each security sold, and
iv.
the amount of the auction dedicated, respectively, to:
(a)
the financing of the government and the redemption of
maturing securities and
(b)
the activities of the Bank of Ghana in connection with
its open market operations.
Operational Guidelines for Government Securities 16
for Primary Dealers
April 2011
4.
Bank of Ghana shall also announce publicly the results of any
additional auctions held by the Bank in connection with its OMO
operations.
5.
Bank of Ghana shall monitor and review the operation of the
wholesale auction arrangements and make necessary modifications
to ensure the smooth running of the new arrangements.
6. Any question relating to the auction may be referred to Bank of
Ghana.
SECONDARY MARKET
a.
Market Share
PDs are expected to achieve and maintain a market presence sufficient to earn
them an appropriate share of secondary market turnover. The BOG expects all
PDs to achieve and maintain trading volume of at least 1/3 of its proportional
market share of all secondary market activity, on a 6-month rolling average
b.
Market Making Procedures
All dealers must show a commitment to participate actively as market makers
over the long-term. Dealers must quote continuous two-way prices in all market
conditions. Quotes by a dealer are considered firm, unless otherwise stated.
c.
Outright Transactions
i)
ii)
iii)
iv)
v)
vi)
vii)
Dealing Practices
Price Quotations
Market lot transactions
Value date
Business hours
Confirmation of deals
Settlement
Operational Guidelines for Government Securities 17
for Primary Dealers
April 2011
i)
Dealing Practices
Government bonds/notes shall be traded on a yield basis but settled on a price
"plus accrued" (dirty price) basis. Prices are to be quoted in multiples of GH¢0.01
for all transactions. Dirty price should be quoted to four decimal places
For "when issued" trading on or prior to the auction date, quotations are on
a
yield basis specified to two decimal places. The prices, based on the transacted
yields, are to be expressed to three decimal places
Similarly, for new issues sold at auctions, bidding for competitive tenders is on a
yield basis with bids specified to two decimal places. The prices, based on the
successful yield bids, are to be expressed to three decimal places.
Treasury bills are quoted on a rate of discount basis, in percentage terms,
expressed to two decimal places. The resultant prices are to be expressed to
three decimal places.
ii)
Price Quotations
Primary dealers are expected to make continuous two-way price quotation.
iii)
Market lot Transaction
The standard "market lot" transaction between dealers shall be GH¢100,000 for
current and 'off-the-run' Government notes/bonds and Treasury bills.
iv)
Value Date
The normal value date shall be the two business days following the transaction
date (T+2) (such trades are referred to as regular trades), unless otherwise
specified at the time of dealing.
Operational Guidelines for Government Securities 18
for Primary Dealers
April 2011
v)
Business Hours
Regular Trades: The normal business hours for regular trade are as follows:
9:00 am to 3:00 p.m. from Mondays to Fridays.
Cash Trades: The normal business hours for cash trades (same day settlement)
are as follows:
9:00 a.m. to 2:00 p.m. from Mondays to Fridays.
vi)
Confirmation of Deals
Issue of Sale/When Issue Message by Seller
For interbank transactions, the seller shall create a Sale/When Issue message
using trading module and transmit the message to the buyer via the system.
For cash trades, the message shall be sent out immediately so that the
transaction can be confirmed before the cut-off time. For regular trades, the
message shall be sent out not later than system cut-off time on the trade date
The message shall include the following information:i.
the seller's code.
ii.
the buyer's code.
iii.
the seller's custody code.
iv.
the buyer's custody code.
v.
the issue code.
vi.
the nominal amount of the security sold and the price at which the
transaction was effected, coupon interest, if any, and the total proceeds of
the transaction.
vii.
the transaction date and value date of the transaction.
viii.
the message unit reference number.
Operational Guidelines for Government Securities 19
for Primary Dealers
April 2011
For transactions between banks and BOG, BOG shall transmit instructions to settle
the transactions upon receiving confirmations from the banks.
Rejection or Confirmation of Deals By Buyer
For interbank transactions, the buyer shall on receipt of a Sale/When Issue
message from the seller check the details of the transaction. If the details of the
transaction are in order, he shall confirm immediately.
Otherwise, he shall reject the message and inform the seller of any disagreement,
errors or omissions immediately (for cash and other trades). If, for some reason(s),
the buyer is unable to inform the seller of any disagreement, errors or omissions
immediately for a non-cash trade, the buyer shall do so not later than the next
business day following the receipt of the unconfirmed message. For cash trades,
the Sale/When Issue message shall be confirmed before the cut-off time; for the
non-cash trades, the message shall be confirmed not later than the cut-off time on
the value date.
For transactions between banks and BOG, banks should confirm the transaction
before the value date for regular trades, and within an hour of the transaction for
cash trades.
vii)
Settlement
a.
Payment against Delivery
Unless otherwise mutually agreed to between the buyer and seller,
settlement shall be on the basis of payment against delivery of the security
transacted.
b.
Settlement date
The settlement of a transaction shall be effected on the value date of the
transaction within the time stipulated by the guidelines, if any, issued by the
BOG.
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April 2011
c.
Settlement Procedures
All settlement procedures shall also be in accordance with the operating
rules in relation to the GIS AND BOOK-ENTRY SYSTEMS, specifically the
rule on transactions and DVP.
d.
Interest claim arising from delay in settlement.
Where the dealer has caused any delay in settlement, the counterparty shall
have the right to claim from the dealer the loss, if any, on the net amount of
the transactions, calculated in accordance to the latest ABS guidelines on
latement. In the settlement of an interest claim, both parties involved shall
observe the rule of non-profit through undue enrichment.
GENERAL DEFAULT
When a person or an entity fails to comply with the requirements of this Guideline,
any Prospectus or notice, the BoG will consider the circumstances of such failure
and determine an appropriate remedy. Such remedy may include prohibiting the
person or entity from participating in future auctions for its own account, for the
account of others, or both. The BoG may also refer such occurrences to the
appropriate regulatory agency for enforcement action. In determining whether or
not there has been any such failure, the BoG may request, and investors, bidders
and Primary Dealers will supply, such information as the BoG may reasonably
require for its determination. An aggrieved party to this document may seek redress
through arbitration.
ORGANIZATIONAL STRUCTURE
A.
Organization
PDs will provide the BOG with an organizational chart of its bond trading unit and
the names of individuals with management responsibilities for trading activities.
This list should include the following
Operational Guidelines for Government Securities 21
for Primary Dealers
April 2011
a) All individuals with oversight responsibilities for trading activities related to
GOG Securities,
b) All individuals with authority to buy or sell GOG Securities, including the
manager of the relevant department. Any changes in personnel with trading
authourity must be reported to the BOG, within seven (7) working days of
assumption of duty by such staff: and,
c)
The Manager for clearing and settlement operations
A PD shall not engage any individual who has been sanctioned in activities
relating to the GoG Securities Market to perform functions relating to same.
Abbreviations
ABS
-
Asset Backed Security
BOG -
Bank of Ghana
OMO -
Open Market Operations
CSD -
Central Securities Depository
PDs
Primary Dealers
-
GoG -
Government of Ghana
G-Sec -
Government Securities
Operational Guidelines for Government Securities 22
for Primary Dealers
April 2011