• Calling days and hours of the governing body of the National Bank of Moldova for citizens.

  • Sergiu Cioclea, Governor of the National Bank of Moldova

    1st Monday of the month: 14.00-17.00;
    Appointment: +373 22 822 606;

  • Ion Sturzu, Deputy Governor of the National Bank of Moldova

    4th Monday of the month: 14.00-17.00;
    Appointment: +373 22 822 607.

Please, note the requirements for receiving and examining petitions to the National Bank of Moldova !

Details

 

Main navigation BNM

Expand Hide
14.06.2013

Regulation on placement and redemption of state securities in book-entry form, approved by the DCA of the NBM, No. 96 of May 17, 2013

Published in the Official Monitor of the Republic of Moldova, 2013, no.125-129, Article 887

Registered
at Ministry of Justice
of the Republic of Moldova
no.919 of 10 June 2013

Approved
Ministry of Finance
of the Republic of Moldova
Veaceslav Negruța
Minister
no.13/2-1/133 of 17 May 2013

COUNCIL OF ADMINISTRATION
OF THE NATIONAL BANK OF MOLDOVA

 

DECISION no.96
of „ 17May 2013

On the approval of the Regulation on placement and redemption
of state securities in book-entry form

Pursuant to Article 11, 26 letter c) and Article 40 of the Law no.548-XIII of 21 July 1995 on the National Bank of Moldova, (Official Monitor of the Republic of Moldova, 1995, no.56-57, Article 624), including further amendments and completions, Article 14-17 of the Law no.419-XVI of 22 December 2006 on public debt, state guarantees and state re-financing (Official Monitor of the Republic of Moldova, 2007, no.32-35, Article 114), including further amendments and completions, the Council of Administration of the National Bank of Moldova

DECIDED:

1. To approve the Regulation on placement and redemption of state securities in book-entry form, according to Annex no.1.

2. To abrogate some normative acts of the National Bank of Moldova, according to Annex no.2.

3. The auctions announced before the entry into force of this decision shall be conducted as those conducted before the entry into force of this decision.

4. This decision shall enter into force on 1 July 2013.

Chairman
of the Council of Administration

Dorin DRĂGUŢANU

Annex no.1
to the Decision of the Council of Administration
of the National Bank of Moldova
no.96 of 17 May 2013

REGULATION
on placement and redemptionof state securities in book-entry form

Chapter I
General provisions

1. This Regulation establishes the rules and procedures for the placement and redemption of state securities issued by the Ministry of Finance of the Republic of Moldova on the domestic market in book-entry form, conditions for participants' access to the primary market, their rights and obligations, as well as other conditions, procedures and principles with regard to the organisation and functioning of state securities market.

2. Pursuant to the Law no.548-XIII of 21 July 1995 on the National Bank of Moldova and the Fiscal Agent Agreement with the Ministry of Finance, the National Bank of Moldova acts as the fiscal agent of the State and is responsible for the organisation and conduct in the name and upon the request of the Ministry of Finance of the auctions for state securities sale in the primary market, recording state securities in the book-entry system, payment of the principal and discount, as well as payment of state securities related interest (coupons).

3. National Bank shall organise and conduct the placement/sale of state securities in accordance with the provisions of this Regulation and in compliance with the principles of market transparency and market access conditions, procedures used for the performance of state securities selling-operations, and with the principles of investors’ protection and non-discriminatory treatment of the participants.

4. Primary dealers and banks that are not primary dealers are the participants of the primary market of state securities.

5. The provisions of this Regulation shall apply to the Ministry of Finance as the issuer of state securities, National Bank as the fiscal agent of the State, primary dealers, their clients and participating banks in the state securities market.

6. The terms defined by the Law no.419-XVI of 22 December 2006 on public debt, state guarantees and state re-financing (Official Monitor of the Republic of Moldova, 2007, no.32-35, Art. 114), with further amendments and completions, shall apply in this Regulation.

7. For the purpose of this Regulation, the following definitions shall also apply:
a) participating bank - a bank accepted by the National Bank to perform operations with state securities exclusively in its own name and account and that concluded an agreement with the National Bank in order to participate in the primary market of state securities;
b) treasury bills (hereinafter T-Bills) - state securities issued at a discount and redeemed at the nominal value at maturity. T-bills mature in one year or less;
c) ISIN code - international securities identification number assigned to every issue of state securities, applied in accordance with the international standard ISO 6166;
d) client (investor) - an individual or legal entity, resident or non-resident of the Republic of Moldova, on which behalf the primary dealer submits the bid for the participation in the auction organised to sell state securities;
e) coupon - regularly paid interest on government bonds to their owners during the term of the bonds circulation;
f) settlement date - the date on which funds for the state securities purchased at the auction are transferred to the Ministry of Finance;
g) maturity date - the date on which state securities are redeemed by the issuer;
h) primary dealer - a bank accepted by the National Bank to perform operations with state securities in the primary market, meeting the selection criteria and which may perform operations in own name and account or in the name and account of its clients, individuals and/or legal entities, residents or non-residents;
i) auction - a way of selling state securities in the primary market in accordance with the provisions of this Regulation;
j) margin - an amount (expressed in percentage points) added to the interest rate of treasury bills as a reference instrument in order to calculate the size of the coupon of government bonds with floating interest rate, which is determined at the auction and remains constant throughout the circulation term of bonds;
k) market maker - primary dealer that is present continuously in the market to trade state securities in own account at prices determined by it;
l) government bonds (hereinafter GB) - state securities issued at a discount, nominal value or premium, with maturities of one year or more, for which the issuer pays periodically interests in accordance with the fixed or floating interest rate as stipulated in the issuance conditions and which are redeemed at nominal value upon maturity;
m) competitive bid - an offer to purchase state securities, where participant indicates the value to be awarded and the price/margin offered;
n) non-competitive bid - an offer to purchase state securities, where participant indicates only the value to be awarded;
o) primary market of state securities - all operations related to the placement of state securities with the purpose of obtaining disposable funds by the issuer;
p) secondary market of state securities - a market where the state securities are traded after their issuance on the primary market;
q) placement of state securities - issuance (sale) of state securities by the issuer through auctions or in a different way on the primary market;
r) unique trading platform - Bloomberg Professional Service electronic platform, provided by Bloomberg Finance LP, through which state securities are placed on the primary market and traded on the secondary market;
s) book-entry system (hereinafter BES) - a depository and settlement system of securities held and operated by the National Bank;
t) circulation term - the number of calendar days from the settlement date to maturity date of state securities;
u) nominal value - the stated value of an issued state security to be paid upon maturity;

 

Chapter II
Primary market of state securities

8. Ministry of Finance issues state securities (SS) on the domestic market in the form of treasury bills and government bonds in national currency. The nominal value of a state security is MDL 100;

9. The characteristics of state securities, their placement, payment of related interest and redemption, as well as the identification elements of issuances are established by the Ministry of Finance in its SS placement communications, in accordance with the provisions hereof and the Conditions of placement, circulation and redemption of government bonds with fixed/floating interest, approved by the decision of the Ministry of Finance no.08 / 3-1 / 323 of 14 August 2008 (Official Monitor of the Republic of Moldova, 2008, no.160-161, Article 450 and Article 451).

10. Ministry of Finance shall assign each issue of SS a registration number (unique identification code ISIN), as set forth in Annex no.1.

11. State securities are issued in book entry form and, therefore, their issuance, record-keeping, confirmation of ownership and the payment of the principal and of the related interest (coupon) is performed through BES.

12. Placement of state securities on the primary market is performed by the National Bank, as the fiscal agent of the State, through auctions, except when the state securities are to be issued and delivered for some purposes established by law or by subscription under the conditions determined and regulated by the Ministry of Finance as the issuer.

13. State securities selling auctions are conducted in accordance with an indicative calendar developed and approved quarterly by the Ministry of Finance, in coordination with the National Bank. Depending on the development and actual situation of state securities market, the Ministry of Finance reserves the right to develop and approve the calendar of SS selling auctions semi-annually or monthly.

14. The calendar of state securities selling actions shall be presented to the National Bank 5 days before the beginning of the quarter following the reporting quarter and shall be published on the official website of the Ministry of Finance and National Bank before the beginning of the quarter for which it is valid.

15. Ministry of Finance reserves the right to modify the indicative volumes of issuance and the maturity of SS initially announced in the SS placement auction calendar through its SS placement communications.
In exceptional cases, the Ministry of Finance may conduct additional auctions of SS placement within the limits set forth in the State Budget Law for the respective year.

16. Primary dealers may submit their bids at auctions in the name and for its own account and on their own behalf and on behalf of clients at their request.
Participating banks may submit bids at auctions exclusively in their own name and account. Investors, individuals and legal entities, resident or non-resident, including the Deposit Guarantee Fund may participate in auctions only through primary dealers.

17. Any primary dealer, participating bank or client is allowed to hold at most 50% of state securities volume with the same ISIN code, offered for sale on the primary market or outstanding.
If these limits are exceeded, the primary dealer, participating bank or client are obliged to sell the state securities, so that to comply with the required limits within 5 working days of the date on which this was detected.

18. In order to ensure the compliance with these limits, the National Bank is entitled to:
1) require the primary dealers to provide the list of clients and their bids for the respective auction;
2) decide not to admit the primary dealer/participating bank/client to participate in one or more future auctions up to the moment of compliance with the requirements set forth in item 17, informing the Ministry of Finance, primary dealers and participating banks about its decision through a notice (Annex no.2).

 

Chapter III
Access on primary market of state securities

Section 1. Selection of banks as primary dealers
and the assessment of their activity

19. Primary dealers are selected to provide specific services on the state securities market by participating in auctions performed on primary market and by trading state securities on secondary market at the prices which they are obliged to announce.

20. The main obligations of primary dealers are to:
1) act as intermediaries between the issuer and investors by distributing the purchased state securities and by facilitating the expansion of investor basis;
2) ensure market liquidity by promoting state securities trading on the secondary market.

21. To acquire and maintain the status of primary dealer, applicant banks shall:
1) submit a request to the National Bank for acquiring the status of primary dealer;
2) conclude with the National Bank the Agreement on fulfilling the functions of primary dealer in the state securities market (Annex no. 3);
3) meet the criteria set out in item 22 of this Regulation for acquiring and maintaining the status of primary dealer.

22. National Bank shall select banks to act as primary dealers and assess their activity in the primary and secondary market of state securities, based on the following criteria:
1) the bank purchased state securities at auctions in own name and account during a 3-month period before the submission of request;
2) the bank maintains the minimum required capital level;
3) no remedial measures have been applied by the National Bank, interdicting to attract deposits;
4) the bank holds a current account with the National Bank;
5) is a participant in BES at the National Bank and organized the record-keeping of securities at Tier II of BES, according to the Regulation on Book Entry System of Securities (Official Monitor of the Republic of Moldova, 2012 no.252-253, Article 1547);
6) has separate spaces required for performing SS operations and qualified personnel who possess knowledge and professional experience necessary to perform the assigned responsibilities;
7) the bank has appropriate technical equipment (Bloomberg Professional Service, software and computer equipment connected to it, specific communication equipment - telephone, fax, etc.);
8) the bank has developed and adopted its own procedures on how to work with clients, keep record of clients, and on internal control relating to state securities activity;
9) the bank acting as primary dealer participates in auctions for sale of state securities in the primary market, as follows:
a) primary dealers whose assets are greater than or equal to MDL 1.0 billion participate in each auction (each ISIN) for sale of state securities;
b) primary dealers whose assets are less than MDL 1.0 billion participate in at least 50 percent of the total number of auctions for the sale of state securities (each ISIN) conducted during the month;
10) the bank has purchases state securities during each quarter in a minimum amount of:
a) 2.0% of the quarterly average volume offered by the Ministry of Finance during four previous quarters - for primary dealers whose assets are greater than or equal to MDL 1.0 billion;
b) 1.0% of the quarterly average volume offered by the Ministry of Finance during four previous quarters - for primary dealers whose assets are less than MDL 1.0 billion;
11) the bank contributes to the creation of liquidity on the secondary market of state securities, performing quarterly transactions in a volume of at least 1.5% of total volume of selling/buying transactions with state securities performed in the previous quarter by all primary dealers (except for the open market operations of the NBM);
12) in order to preserve the secondary market, the bank publishes daily firm quotes in a minimum volume set at its discretion for at least three types of state securities recently placed on the primary market auctions or any three types of state securities available in its portfolio.

23. The provisions of item 22 sub-item 9), 10), 11), and 12) shall be applied only for the period of activity as primary dealer.

24. Based on the criteria for the selection of banks as primary dealers and based on the assessment of their activity, National Bank shall determine and amend the list of primary dealers and shall publish it on the official website of the National Bank. National Bank shall monitor continuously and analyse quarterly the activity of primary dealers.

 

Section 2. Suspension and withdrawal of the status as primary dealer

25. National Bank may temporarily suspend or withdraw the status of primary dealer, by suspending or terminating the agreement on the performance of the functions of primary dealer.

26. National Bank may suspend the activity of primary dealers where deviations from the provisions of this Regulation are detected, with a 10-day prior written notification of primary dealers.

27. Depending on the seriousness of the violation, National Bank may suspend the status of primary dealer without prior notification, informing them about its decision within 2 working days.

28. In case of suspension, the status of primary dealer is reacquired upon the expiry of the period for which the suspension was imposed.

29. National Bank may withdraw the status of primary dealer in the following cases:
1) following the withdrawal of bank's license to conduct financial activities;
2) at the request of the primary dealer, provided prior notification to the National Bank within 30 calendar days.

30. In case of withdrawal of the status of primary dealer, this may be reacquired on the basis of a request to the National Bank only after the expiry of a 3-month period from the termination of the agreement, provided that the primary dealer complies with the criteria set out in item 22.

31. Temporary suspension or withdrawal of the status of primary dealer shall have no effect on the rights and obligations of the primary dealer with regard to the contracts concluded with clients before the date on which the suspension or withdrawal of the status of primary dealer was communicated.

32. National Bank shall inform in writing the Ministry of Finance of the suspension or withdrawal of the status of primary dealer.

 

Section 3. Access conditions for participating banks

33. To acquire the status of participant in the primary market of state securities, the applicant banks shall submit a request to the National Bank and shall conclude with the National Bank the Agreement of the participant in the state securities primary market (Annex no.4).

34. Participating banks shall meet the following additional conditions:
1) hold a current account with the National Bank;
2) hold the status of participant in BES of the National Bank;
3) have qualified staff and appropriate technical equipment to ensure the performance of transactions with state securities (Bloomberg Professional Service, specific communications equipment - telephone, fax, etc.).

35. The suspension and withdrawal of the status of participant in the primary market of state securities shall be performed in accordance with the provisions of items 25-29 of this Regulation, except for the term provided for in item 29 sub-item 2), which is of 5 working days for participating banks.

36. In addition to the cases referred to in item 29 of this Regulation, the National Bank has the right to terminate the Agreement of participant in the state securities primary market if the commercial bank acquires the status of primary dealer in the state securities market.

 

Chapter IV
Technical means used at auctions

37. State securities placement auctions are conducted in the electronic system of Bloomberg Professional Service - Bloomberg Auction System (BAS). Detailed procedures for the use of this system in order to participate in the auctions of state securities placement are stipulated in the Bloomberg Auction System User Guide.

38. Only National Bank, primary dealers and participating banks shall have access to BAS through authorized and registered representatives in the system.

39. Primary dealers and participating banks as users of BAS shall:
1) study, accept and respect the rules of use of BAS;
2) designate and ensure the registration in BAS of at least two persons as users with the right to conduct transactions with state securities on behalf of the bank and shall submit to the National Bank the list of such persons (Annex no.5), including any further changes;
3) ensure that the designated persons are trained to use the BAS platform and use it accordingly;
4) announce the National Bank in due time about the difficulties that arise in using the system.

40. In exceptional cases, taking into account the nature of the problems, when those occurred and the number of participants at auction who have experienced difficulties in using BAS, the National Bank may apply one of the following alternative options:
1) Option A - to extend the time for the receipt of bids;
2) Option B - to postpone the auction for the next day;
3) Option C - to use an alternative electronic system (developed in-house) and the transportation component of AIPS for the auction.

41. Option A shall apply where one or more participants at auction inform about the BAS inaccessibility with at least 15 minutes before the time limit for the receipt of bids. National Bank may extend the time for the receipt of bids at most until 4:00 pm local time.

42. Options B and C may be applied if the National Bank decides that the problems with the use of BAS cannot be solved by applying option A.

43. Application of alternative options may also include, where appropriate, the receipt of bids on paper certified by the bank manager's signature and stamp and parallel use of other means of communication - e-mail or fax.

44. National Bank shall immediately inform BAS users and the Ministry of Finance about the application of the alternative options A-C and actions to be taken by them.

45. If the primary dealer / participating bank submitted their bids by other means than through the BAS, these will present to the National Bank a written explanation indicating the reason thereof.

46. Ministry of Finance shall communicate with the National Bank with regard to the actions conducted on the primary market of state securities by secure e-mail and the Ministry of Finance shall present to the National Bank the list of persons with access rights. In case of impossibility to use the secure e-mail because of technical problems, as appropriate, alternative means of communication may be used - interbank web page, documents on paper.

 

Chapter V
Auction procedures

Section 1. Announcement of auctions

47. Auctions of state securities placement are conducted for each ISIN code in two phases: competitive and non-competitive bidding. In the competitive bidding may be submitted only competitive bids and in the non-competitive bidding only non-competitive bids.

48. The participation in the non-competitive bidding is optional for primary dealers.

49. Concomitant conduct of two or more auctions is possible.

50. Ministry of Finance shall present to the National Bank communications on SS placement (Annex no. 6 and no.7) with 5 days before the auction (for additional auctions, at the latest on the day preceding the auction).

51. The communication on state securities placement shall include the following issuance elements:
1) for all types of state securities offered for placement:
a) auction date;
b) type of state securities;
c) ISIN code;
d) nominal value of a state security;
e) indicative volume of the issue;
f) circulation term of state securities;
g) selling conditions;
h) settlement date;
i) maturity date;
2) additional for GB:
a) annual interest rate (for GB with fixed interest rate)/annual variable interest rate for the calculation of the first coupon (for GB with floating interest rate);
b) terms of payment of interest;
c) maximum margin (for GB with floating interest rate).

52. Upon the receipt of the communication on the placement of SS from the Ministry of Finance, the National Bank shall send to primary dealers and participating banks the invitations to auction (for competitive bidding and non-competitive bidding), through BAS, 4 calendar days before the auction (in the case of additional auctions at the latest on the auction day an hour before the time limit for the receipt of bids), which shall include the auction number, description of SS, date and time set for the receipt of bids, the indicative volume of the issue, the time limit for the announcement of auction results and other details of the securities offered for sale, according to the communication.
In the competitive bidding, a volume equal to 85% of the indicative issue volume is announced for placement, while in the non-competitive bidding a volume equal to 15% of the indicative issue volume is announced for placement.

53. Simultaneously, the National Bank and the Ministry of Finance shall publish on their official websites the communications on state securities placement.

54. As for the government bonds with floating interest rate, the annual variable rates for the calculation of future coupons shall be announced in the communications of the Ministry of Finance 5 calendar days before the start of the respective coupon period (Annex no.8). The communications shall be published on the official websites of the National Bank and the Ministry of Finance. At the same time, the National Bank shall send these communications to primary dealers and participating banks via Bloomberg messaging.

 

Section 2. Preparation and submission of bids

55. Bids shall be submitted by primary dealers and participating banks on the day of auction through BAS. Both competitive bids and non-competitive bids may be submitted from 8:30am (start time for the receipt of bids) to 10:00am local time (time limit for the receipt of bids), unless otherwise indicated in the invitation to action.

56. Primary dealer/participating bank are responsible for the submission of bids through BAS and are entitled to modify or revoke the submitted bids until the time limit for the receipt of bids. No modification or revocation of submitted bids is allowed after the expiry of the time limit set for the receipt of bids, these constituting firm commitments of participants.

57. Both competitive bids and non-competitive bids shall be prepared separately for each ISIN code.

58. In the competitive bidding, the primary dealer may submit an unlimited number of competitive bids on own account and on the account of its clients.
In the non-competitive bidding, the primary dealer may submit only one non-competitive bid on own account, but an unlimited number of non-competitive bids on the account of its clients.

59. The participating bank may participate only in competitive bidding and may submit an unlimited number of competitive bids on own account.

60. The total volume of competitive bids submitted on own account by a primary dealer, competitive bids of each client of a primary dealer, and the volume of competitive bids of a participating bank shall not exceed 50% of the indicative issue volume of the competitive bidding for each ISIN code.

61. The volume of the non-competitive bid submitted on own account by a primary dealer and the volume of the non-competitive bid submitted on the account of a client (investor) shall not exceed MDL 300 000 at par nominal value for each ISIN code.

62. The volume of SS indicated in the participants' bids, regardless of their type, shall represent a multiple of the nominal value of SS. The purchase price (expressed in percentage of the nominal value) for T-bills or GB with fixed interest rate and the margin asked for GB with floating interest rate shall be indicated in the competitive bids with two digits after the decimal point.

63. The primary dealer shall prepare the competitive bids and non-competitive bids on the account of its clients as follows:
1) for the Deposit Guarantee Fund, clients with the status of personal account holder in BES at the National Bank, separately for each client, the digit “2” shall be indicated in the respective box and, separated by comma, the BES identification number (assigned to the Deposit Guarantee Fund and to personal account holders upon opening of the respective accounts at Tier I of BES);
2) for other categories of clients, the digit “2” shall be indicated in the respective box.

64. Bids that do not meet the conditions set by this Regulation shall be rejected.

 

Section 3. Auction allotment

65. The information on the received competitive bids and non-competitive bids (volume and prices/margins) shall be sent to the Ministry of Finance immediately after the expiry of the time limit for the receipt of bids, which shall inform the National Bank in at most 1 hour about its decision with regard to the minimum accepted price/maximum accepted margin and the volume of SS to be allocated for each ISIN code (Annex no.9), on the basis of which the National Bank will make the allotment and will end both phases of the auction.

66. The Ministry of Finance reserves the right to increase the issue volume for each ISIN code by maximum 30% compared to the indicative issue volume, depending on the financing needs and/or the interest rate level.
Depending on the interest rate level accepted by the Ministry of Finance by reference to market conditions, the Ministry of Finance may decrease the issue volume compared to the announced indicative issue volume, as well as may cancel the respective issue.

67. Allocation in the first phase of the auction means to rank the bids in descending order of prices or ascending order of margins offered and to determine the volume of SS, which price/margin satisfies the volume announced for placement by the Ministry of Finance.
If several bids have been submitted at the minimum price / maximum margin that can not be fully executed and the Ministry of Finance does not increase the volume of issuance to their full execution, the remaining amount shall be executed pro rata. The amount allocated to each bid is rounded upwardly to the nearest value divisible by the nominal value of a SS.

68. For the allocation of SS in first phase of the auction, the following procedures may be used:
1) in the case of T-bills and GB with fixed-interest rate - multiple price auction procedure, according to which the allotment of state securities is performed at the price proposed in each competitive bid.
The weighted average price at which the bids are awarded in the non-competitive phase of the auction is calculated based on the prices proposed in the bids of the winning participants;
2) in the case of GB with floating interest rate - single rate auction procedure, according to which all bids of participants are satisfied at the maximum accepted margin.

69. In the non-competitive bidding, the bids are allotted at the weighted average price of the bids awarded in the competitive bidding (with the same ISIN code), within the volume announced in the non-competitive bidding. If the aggregate volume of non-competitive bids exceeds the volume announced for placement in the non-competitive bidding, the respective bids shall be satisfied pro rata, according to the volume of the submitted bid, rounding the value upwards to the nearest value divisible by the nominal value of a SS.

70. If the total allotted volume is equal or higher than the indicative issue volume announced by the Ministry of Finance, the non-competitive bids shall be awarded in a volume not exceeding 15% of the indicative issue volume.
Non-competitive bids may be awarded in a volume exceeding 15% of the indicative issue volume if the total volume of bids submitted at the auction is lower than the indicative issue volume and the amount of the awarded competitive bids is less than 85% of the indicative issue volume.
If the volume of non-competitive bids submitted at the auction is lower than the volume announced in the non-competitive bidding, the uncalled volume shall be awarded according to the competitive bids, upon a decision of the Ministry of Finance.

71. The volume of SS allocated in non-competitive bidding will be 0 if in the competitive bidding of the auction no bids have been submitted or the volume of SS allocated in the competitive bidding is 0.

 

Section 4. Calculation formula used for SS placement

72. When calculating the interest rates / prices of SS, the convention "actual/365" shall be used - the number of calendar days in the month and 365 days in the year.

73. Nominal interest rate of a T-bill shall be determined as follows:

 

where:

- annual nominal interest rate (%);

N- nominal value of a T-bill (MDL);

P- purchase price of a T-bill (MDL);

- number of days to maturity.

 

74. Effective interest rate of a T-bill shall be determined as follows:

where:

- annual effective interest rate (%);

- nominal value of a T-bill (MDL);

P- purchase price of a T-bill (MDL);

- number of days to maturity.

75. Interest rate of a GB shall be determined as follows:


where:

P- price of a government bond (including the accrued coupon), (MDL);

n- number of coupons to be paid;

Cn- size of coupon "n" (MDL);

N- nominal value of a GB (MDL);

i- interest rate of a GB (%);

tn- number of days to coupon "n" payment.

76. Coupon of a GB shall be determined as follows:

where:

- size of coupon (MDL);

- nominal value of a GB (MDL);

r - interest rate (of coupon) of a GB (%);

- coupon term.

77. Weighted average price of executed non-competitive bids shall be determined as follows:

where:

Pmp - weighted average price (MDL);

P- price indicated inisuccessful competitive bid (MDL);

V- amount indicated inisuccessful competitive bid (MDL);

 - number of successful competitive bid;

- total number of successful competitive bids awarded at the auction.

78. Percentage of pro rata allocation and the allotted amount at minimum accepted price/maximum accepted margin shall be determined as follows:

where:

all% - percentage of pro rata allocation;

V- total allotted amount;

V- aggregate amount of bids executed at a higher price/lower margin than the minimum accepted price/maximum accepted margin;

V- aggregate amount of bids submitted at the minimum accepted price/maximum accepted margin;

S- amount allotted to each bid submitted at the minimum accepted price/maximum accepted margin;

C- value of each bid submitted at the minimum accepted price/maximum accepted margin.

 

Section 5. Announcement of auction results and settlement thereof

79. After the end of the auction, on the same day, before the time limit for the auction results announcement, the National Bank shall inform the primary dealers and participating banks through BAS about the allocation of SS, according to the bids submitted. At the same time, they have access to information about the total results of the auction (separately for competitive bidding and non-competitive bidding), which in particular include:
1) announced indicative issue amount (for competitive bidding);
2) amount of competitive bids submitted;
3) amount of SS allotted in competitive bidding;
4) minimum accepted price and maximum accepted interest rate;
5) maximum accepted price and minimum accepted interest rate;
6) weighted average price and interest rate of accepted bids;
7) minimum offered price and maximum offered interest rate;
8) maximum offered price and minimum offered interest rate;
9) weighted average price and interest rate of submitted bids;
10) percentage of pro rata allocation of competitive bids;
11) the ratio of the amount of competitive bids submitted and indicative issue amount for the competitive bidding;
12) the ratio of the amount of bids submitted and amount of SS allocated in the competitive bidding;
13) amount announced for placement in non-competitive bidding;
14) amount of non-competitive bids submitted;
15) amount of non-competitive bids allotted;
16) the ratio of the amount of non-competitive bids submitted and amount of SS announced for placement in non-competitive bidding;
17) maximum accepted margin and interest rate applied for first coupon payment, in the case of GB with floating interest rate.

80. Information on the results of auctions of SS placement shall be published by the National Bank and Ministry of Finance on their official websites.

81. At the request of the National Bank, primary dealers shall present the list of investors that purchased SS at the auction, including the requested ISIN code, at the latest on the first working day after the auction until 10:00 am (Annex no.10).
If the investor has purchased at the auction more than 50% of SS with the same ISIN code, the National Bank shall inform the respective primary dealers about this by a notice on the first working day following the auction (Annex no.11).

82. On the auction day, after its closing, the National Bank shall conclude the report on the results of SS sale in the primary market, which is transmitted into BES at the National Bank.
For the total amount of SS allocated at the actions, the Ministry of Finance shall present to the National Bank a global certificate for each ISIN code of the issue at the latest on the first working day after the auction (Annex no.12).

83. The transactions with state securities sold in auctions shall be settled on the settlement date indicated in the communications on SS placement (usually T+2).

84. Primary dealers, participating banks and the Deposit Guarantee Fund are obliged to ensure on their settlement accounts with the National Bank availability of sufficient funds, on the settlement date, in an amount sufficient to pay for the SS, according to the results of the auction, at the beginning of the stage "Payments and clearing" of the AIPS operational day;

85. On the settlement date, National Bank shall charge from the current accounts of primary dealers, participating banks and the Deposit Guarantee Fund the payment for the SS awarded at the auction, by issuing payment orders in their name for subsequent registration of the respective amounts in the single treasury account opened with the National Bank.

86. On settlement day, after charging the respective funds, the National Bank shall register in BES the ownership of SS.

87. If the primary dealer, participating bank or the Deposit Guarantee Fund fail on the settlement date, until 3:00 pm, to ensure the availability of funds on their current accounts with the National Bank, in an amount sufficient to pay for the SS purchased at the auction, National Bank shall charge the payment for SS with that ISIN code for which there are sufficient funds in their accounts. National Bank shall not register in BES the SS awarded at the auction for which no payment was made until 3:00 pm and shall apply a single fine in the amount of 0.1% of the unpaid amount of SS.
National Bank shall charge from the respective bank / Deposit Guarantee Fund the fine referred to in the preceding paragraph on the first working day after the payment obligation falls due. The fine is paid into the state budget.
National Bank may also suspend the access of the bank / Deposit Guarantee Fund to one or more subsequent auctions.

88. On the settlement date, the National Bank shall inform the Ministry of Finance about the amount of SS for which no payment was made.

 

Chapter VI
Redemption of state securities and payment of related interests

89. Redemption of SS and/or payment of interest (coupons) on GB shall be made by the Ministry of Finance through the National Bank.

90. On the maturity date and / or interest payment date, but only after the Ministry of Finance transfers the related funds, National Bank shall register the amount of SS redemption and / or payment of interest (coupon) for the GB in the current accounts with the National Bank of the primary dealers, participating banks and Deposit Guarantee Fund.
If the date of any payments relating to state securities is a holiday, the respective payment shall be made on the first working day thereafter, with no additional interest payment.

 

Chapter VII
Activity of primary dealers with clients

91. Primary dealers are required to have internal procedures relating to the conduct of operations in the SS market and relating to their activity with clients.

92. Internal procedures shall include provisions relating to all types of transactions that may be made by clients, the ways in which transactions will be completed, including description of the types of orders that may be sent by clients, order execution conditions (including reservation of funds), term of validity, and the record-keeping manner of clients' orders and holdings to ensure the integrity and safety of funds and securities of the clients on whose behalf the primary dealers act.
Procedures shall also contain provisions on the requirements for qualification of personnel responsible for customer service upon conducting operations with SS.

93. When executing orders on the account of clients, primary dealers shall apply appropriate measures to ensure the immediate and priority execution of clients' orders in relation to those executed in own name and account.

94. Primary dealers shall inform investors about SS selling auctions, by displaying communications on SS placement and the results of previous auctions in the bank's headquarters and branches where clients have access to.

95. Primary dealers are obliged to accept from clients SS purchase orders as from the moment of receiving from the National Bank an invitation to participate in the ordinary auction until the end of the working day before the eve of the auction day.
Clients' orders may be also accepted on the day of the auction, if the primary dealers consider that these may be processed until the time limit fixed for receipt of bids by the National Bank from the primary dealers through BAS.

96. Clients' orders for the purchase or sale of SS may be submitted by them in writing (prepared in accordance with Annex no.13), by telephone, by fax, in electronic form or in any other way agreed by the parties.

Primary dealers shall accept clients' orders by telephone/fax/email with a subsequent written confirmation as provided for in this Regulation.

97. Primary dealers are obliged to ensure that investors are aware of the need to comply with the limits imposed on holding SS with the same ISIN code and with the limit of MDL 300 000 in the case of non-competitive bids for purchasing SS at auctions.
Primary dealers shall require clients to submit a written declaration of compliance with the holding limit of SS with the same ISIN code, including upon their purchase and through other primary dealers and shall inform about the obligation to sell the SS purchased over the limit.
Clients shall be informed by primary dealers that the National Bank, in the exercise of its powers, may communicate to all primary dealers the name of investors that have failed to comply with the holding limit of SS with the same ISIN code.

98. Primary dealers have the right to reject SS purchase orders, if the client requests amount of SS above the established limits or they are executed incorrectly.

99. Primary dealers shall establish by contractual relationships with clients their rights and obligations, the term and manner of payments related to transactions with SS, depending on the tolerance level of risk to which they are exposed.
Any operations on the account of a client is prohibited, if there is no any order to this effect from the client, prepared and submitted as required by item 96 of this Regulation.

100.Primary dealers commits themselves to:
1) reimburse to clients the funds reserved for purchasing SS at auctions, in the amount of unsuccessful bids, at the latest on the first working day following the announcement of auction results by the National Bank;
2) perform proper allocation of SS awarded at the auction for the clients' orders that are not executed entirely, according to the percentage of pro rata allocation established at the auction;
3) register the amount of redeemed SS/related interest in the current accounts of clients at the latest on the first working day following the maturity date of SS/interest payment date;
4) receive from clients orders for purchasing/selling SS in the secondary market and take all necessary measures to ensure their execution at interest rates comparable to those set on the market;
5) notify the client in writing, by fax or otherwise agreed by the parties about the execution or non-execution of orders in due time;
6) organise customer service upon performing operations with SS, including bank branches.

101. The activity of primary dealers with the Deposit Guarantee Fund in the process of participation in the primary market of SS includes the following:
1) conclusion of the contract for the provision of services in the primary market of SS;
2) receive, verify the SS purchase orders and send them through BAS in the context of the tender bid;
3) notification of the execution or non-execution of purchase orders of SS.
Deposit Guarantee Fund shall communicate to the National Bank the name of the primary dealer with whom the contract for the provision of services on SS market was concluded.
Primary dealers shall not require the Deposit Guarantee Fund to reserve funds in order to execute purchase orders of SS. Deposit Guarantee Fund shall ensure the availability of necessary funds in its current account with the National Bank, according to the provisions of the Agreement on the participation in the primary market of state securities (Annex no. 14).
State securities placement and redemption payments and related interest shall be carried out strictly between the National Bank and the Deposit Guarantee Fund in accordance with the agreement.
State securities of the Deposit Guarantee Fund shall be recorded into its account no.II opened at Tier I of BES at the National Bank.

 

Annex no.2
to the Decision of the Council of Administration
of the National Bank of Moldova
no.96 of 17 May 2013

 

LIST
of normative acts of the National Bank of Moldova to be abrogated

1. Decision of the Council of Administration of the National Bank of Moldova no.201 of 9 August 2007 "On the approval of Instruction on the placement, circulation and redemption of state securities in book-entry form" (Official Monitor of the Republic of Moldova, 2007 no.136-140, Art.533), registered with the Ministry of Justice of the Republic of Moldova under no.503 of 21 August 2007.

2. Item 8 of the Decision of the Council of Administration of National Bank of Moldova no.139 of 31 July 2008 "On amending and supplementing some normative acts of the National Bank of Moldova" (Official Monitor of the Republic of Moldova, 2008, no.171-173, Art.496), registered with the Ministry of Justice of the Republic of Moldova under no.601 of 8 September 2008.

3. Item I of the Decision of the Council of Administration of the National Bank of Moldova no.202 of 23 October 2008 "On amending and supplementing some normative acts of the National Bank of Moldova" (Official Gazette of the Republic of Moldova, 2008, nr.198-200, art.603), registered with the Ministry of Justice of the Republic of Moldova under no.618 of 30 October 2008.

Subscribe to Newsletter
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.