The secondary T-bills market will actually become operational as of the second half of November, with the operating regulation scheduled to be published in the Official Gazette soon, Enache Jiru, head of the State Treasury, told Ziarul Financiar. This market is aimed at trading previously sold T-bills.
Each security will have a price, a quotation depending on supply and demand and on the interests in the banking system, with the yield (the traded interest), which is the actual T-bill interest/ trading price ratio, set as the benchmark.
This market is expected to be a major business due to the high amounts of money involved (billions of dollars). Those directly involved in this market, that is the National Securities Commission (CNVM), the National Bank of Romania (NBR) and the Finance Ministry have been engaged in a heated debate over the past few months, trying to agree on the regulation, and on the exact location for trading T-bills.
CNVM wanted it to be the Stock Exchange, but the Finance Ministry and NBR did not fully subscribe to the idea.
“Last week, together with CNVM and NBR, we sent the final draft of the regulation for trading T-bills to the Official Gazette and requested it to be published on August 9. We hope to have this market operational as of November 15, as stipulated in the regulation,” Jiru said.
The T-bills market, that is a market where they could be traded, has been expected for several years, but so far, the authorities have avoided issuing regulations for the operation of such a market.
There are T-bills transactions between banks and clients at the moment, but the prices (interests) are not publicly announced.
Some of the new things in this regulation include access of natural persons to the primary T-bills market (as only legal persons have been allowed on this market so far) by non-competitive orders (i.e. – competitive orders entail specifying interests).
Furthermore, the public securities maturing in up to one year will be possible to trade only on the interbank market, while those maturing in more than a year will be possible to exchange on both interbank and capital market at their respective Bucharest Stock Exchange quotation.
As regards T-bills maturing in more than twelve months, the Finance Ministry will be bound to specify the secondary market where the issue of such securities is to be traded.
So far, the banks have been the top players on the public securities market and they have gained large amounts of money from placements in T-bills. The new norms, however, allow securities companies access to both the primary and the secondary market, as well.
The regulation, in its final draft, will require brokerage companies to have at least 75bn lei in capital to be allowed on the primary market (that is 50% of the share capital required by NBR for a commercial bank), where the Finance Ministry sells the T-bills first, and 37.5bn lei in capital to be allowed on the secondary market, where the T-bills are traded.