Securities' auction procedures: SBP unveils changes
KARACHI: Changes in Procedures of government securities auctions and monetary policy liquidity operations in respect of Pakistan Real-Time Interbank Settlement Mechanism Plus (PRISM+).
The State Bank of Pakistan (SBP), under its Vision 2028, has decided to launch the PRISM+ with effect from June 16 to upgrade the National Digital Payments Infrastructure.
PRISM+ is built on the ISO 20022 financial messaging standard which supports structured and data-rich financial communication, enabling enhanced transparency, interoperability, and automation across the payment and settlement ecosystem.
Govt securities: SBP streamlines buyback process
With the launch of PRISM+ System, a new interface has been developed for efficient conduct of auctions and market operations. Accordingly, some changes are being made in procedures.
Now auctions of government securities including Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs) and their buyback auctions, will be conducted through the PRISM+. Conventional Open Market Operations (Injections, and Mop-up) will be conducted through PRISM+. However, Shairah Compliant OMOs as well as Bai Muajjal will continue to be conducted through the existing mechanism.
In respect of Conventional OMOs conducted through PRISM+, all eligible institutions will submit bids at PRISM+. They will tag one or more than one government securities with each bid. The face value of the bid will be considered equal to the face value of tagged/offered government securities.
In addition, the realized value of the government securities will be calculated by PRISM+ based on applicable revaluation rates, prices, and haircuts. In case of multiple securities tagged with the bid subject to pro-rata, the government securities having the shortest remaining life/maturity will be allocated first toward pro-rata.
Conventional Reverse Repo (Ceiling) and Repo (Floor) facilities will be offered through the new TMON/X platform. Shariah Compliant Corridor facilities will, however, continue to be conducted as per existing procedure.
The PRISM+ also offers a platform for secondary market outright and repo-based trading of government securities. All government securities held in custody of SBP will be available for trading. The PRISM+ also provides mechanism for when-issued trading of PIB-Fixed coupon bonds before auctions.
According to the SBP, auction/OMO announcements and results will be visible on Bloomberg/Refinitiv in addition to PRISM+ and all participants will continue to send Auction, OMO and Corridor deal confirmation letters to SBP BSC-Karachi Office through the existing DAP mechanism.
These changes will come into effect from June 16, 2025. All other instructions shall remain unchanged, SBP concluded.
Copyright Business Recorder, 2025
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