How Auctions Are Conducted

Singapore Government Securities (SGS) bonds, T-bills and MAS Bills are issued via auctions, which are held according to the annual issuance calendar. Find out how the auction process works.

Timeline

SGS and MAS Bills auctions typically take place 3 business days prior to issuance. You can take part by applying through any of the primary dealers. For auction dates and results, view the issuance calendar.

Who Can Take Part

SGS auctions are open to all institutions and individuals, including non-residents. 

The MAS may participate in SGS auctions on a non-competitive basis. The SGS purchased is used in money market operations via repos. 

Any amount that MAS plans to apply for is announced to the market before each auction. In addition, MAS may increase or decrease the amount it purchases based on the auction safeguard mechanism.

MAS Bills auctions are open to institutional investors only. MAS does not take part in MAS Bill auctions. 

 

Auction Format

SGS bonds, T-bills and MAS Bills are issued via a uniform-price auction.

While competitive and non-competitive bids are accepted for SGS bonds and T-bill auctions, only competitive bids are accepted for MAS Bill auctions. 

Successful competitive and non-competitive bids (where applicable) will be allotted the securities at a uniform yield, which is the highest accepted yield (or cut-off yield) of successful competitive bids submitted at the auction. 

Non-competitive bids will be allotted first. The balance of the issue amount will be awarded to competitive tenders from the lowest to highest yields.

Allotment Limits

In general, there is no limit to the number of competitive bids you can submit.

All non-competitive bids are allotted in full, subject to the allocation limits. The total non-competitive allotment is:

  • Limited to 40% of the issue on offer.
  • Pro-rated if the total application amounts exceed this limit.
The maximum SGS and T-bills allotments for primary dealers and non-primary dealers are as follows:
Type of dealer Competitive bids The maximum auction allocation limit is also 30% and 15% for primary dealers and non-primary dealers, respectively. This includes the allocation under competitive and non-competitive bids. Non-competitive bids

Primary dealer

30%

1%The 1% limit applies to the primary dealer. If a primary dealer enters a bid on behalf of a client, the client is subject to the non-primary dealer limit of S$2 million per bond application.

Non-primary dealer

15%

S$2 million per bond application;
S$1 million per T-bill application

Allotment limit is not imposed on MAS Bill auctions.

Auction Process and Timeline

An SGS or MAS Bills auction follows several steps: announcement, auction, results and settlement. The relevant dates for all auctions are published in the issuance calendar.

1. Announcement

The auction announcement includes information such as:

  • Amount of the security on offer.
  • Auction date and closing times.
  • Issue date.
  • Other terms and conditions of the offering.

Once an auction is announced, you can submit your bid for the security you want to buy.

For planned auctions and announcements, check the issuance calendar.

2. Auction

When: SGS - 5 business days after the announcement; MAS Bill - 1 business day after the announcement 

All bids need to be submitted by noon on auction day.

Only primary dealers can submit bids to MAS at SGS and MAS Bills auctions via eApps.

Underwriter
Yes. Each primary dealer is obliged to tender for an equal share of the issue on offer.
Post-auction subscription
No
Cut-off time
By noon on auction day.

Note: For individual investors, applications for SGS through ATMs and internet banking typically close 1 to 2 business days before the auction. Check with your bank for the exact cut-off time.

When-issued trading
Yes
Interest payments for SGS Bonds
Every 6 months, starting from the month of issue. Paid on the first business day.
3. Results

When: About 1 hour after the auction

The auction results include information such as:

  • Average and cut-off prices and yields.
  • Percentage of applications allotted at cut-off.
  • Total amount of the security applied for and allotted.

View SGS auction results.

4. Settlement

When: 3 business days after results

SGS and MAS Bills are scripless.

After issuance, your holdings will be reflected:

  • For institutional investors, in their custody accounts.
  • For individual investors, in the Central Depository (CDP)

Auction Safeguard for SGS auctions

Although SGS auctions are fully underwritten by primary dealers, the SGS market is not immune from global developments.

The auction safeguard mechanism allows MAS to vary its subscription amount to offset unexpected changes in investor demand. This makes the SGS auction system more resilient.

How it Works

The auction safeguard mechanism takes place when the auction cut-off yield is more than 25 basis points below or above the market yield.

If that happens, MAS may subscribe for a lower amount in an unexpectedly strong auction, or a higher amount in an unexpectedly weak auction.

The auction safeguard thus helps to lower the risk of volatility or disorderly adjustments in the secondary SGS and broader Singapore dollar corporate debt markets.

How the Coupon Rate is Determined

The coupon rate for a newly issued SGS bonds is the cut-off yield of successful competitive bids rounded down to the nearest 0.125%. The minimum coupon rate for a SGS bond would be 0.125%.

If the cut-off yield is higher than the coupon rate, the purchase price would be lower than 100% of the bid amount. The difference would be credited back into the individual investor's bank account.

Conversely, if the cut-off yield is lower than the coupon rate, the purchase price is higher than the bid amount, and the difference is debited from the account.

For T-bills and MAS Bills, the cut-off yield is not rounded down, and is equivalent to the discount rate.