BTr postpones non-restricted trading, settlement system for gov’t securities

MANILA, Philippines - The Bureau of Treasury (BTr) has moved the implementation of a non-restricted trading and settlement environment for government securities to early next year to allow  concerned parties to address operational concerns.

The BTr was earlier looking at rolling it out on Nov. 24.

“In recognition of the market community’s request to complete activities towards market education, systems preparedness, addressing operational concerns and other preparatory activities towards a smooth transition to non-restricted trading and settlement environment, the target live date for the implementation of the subject initiative is moved to Jan. 5, 2015,” the BTr said.

“In this regard, all concerned market participants are enjoined to expedite the processing of documentary requirements for setting up of the requisite accounts/investor codes and complete all necessary preparatory activities by Dec. 15, 2014,” the BTr added.

The BTr is unifying the taxable and tax-exempt segment of the market by lifting the current restrictions in a move aimed at boosting liquidity in the secondary government securities market.

Under Department Order 68-2014, government securities may be traded by various entities, regardless of their tax category or classification, in any securities trading market accredited by the BTr.

Securities held by government-owned and controlled corporations (GOCCs) and local government units (LGUs) may be transferred prior to maturity only with GOCCs and LGUs which maintain securities account in the book entry of the BTr.

Transfers between market participants will likewise be allowed regardless of tax status.

Tax-exempt institutions currently account for 21 percent of government securities, mostly held-to-maturity.

Purisima said the lifting of trading restrictions will allow the BTr to engage, designate, or employ facilities or systems that would enhance the existing registry capabilities of the Registry of Scripless Securities (RoSS).