1 / 22

Developing a Deep and Liquid Bond Market - Experience of Sri Lanka

Developing a Deep and Liquid Bond Market - Experience of Sri Lanka. Presentation by K.G.D.D.Dheerasinghe Assistant to the Governor Central Bank of Sri Lanka. Development of the Bond Market Events of Significance.

fagan
Télécharger la présentation

Developing a Deep and Liquid Bond Market - Experience of Sri Lanka

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Developing a Deep and Liquid Bond Market - Experience of Sri Lanka Presentation by K.G.D.D.Dheerasinghe Assistant to the Governor Central Bank of Sri Lanka

  2. Development of the Bond MarketEvents of Significance • 1923 - Issue of loans commenced under the Colonial Treasury Bill Ordinance by Crown Agents in U.K. • 1937 - Issue of Rupee Loans commenced under RSSO No.7 of 1937 • 1941 - Issue of Treasury Bills commenced under LTBO (Chapter 287) • 1950 - Public debt management was vested with the Central Bank under the Monetary Law Act. • 1981 - A secondary market window was opened for Treasury Bills by the Central Bank. • 1986 - Weekly Treasury Bill auctions commenced • 1992 - Primary Dealers were appointed.

  3. Development of the Bond Market contd... • 1993 - Repo window for Treasury Bills was introduced by the CBSL. • 1994 - Primary Dealer system was recognised. • 1995 - Non-competitive bidding at primary auctions was phased out. • 1995 - Reverse Repo window was introduced by the CBSL. • RSSO, LTBO and MLA were amended to enable scripless issue of Treasury Bills and Treasury Bonds. • 1997 - Issue of Treasury Bonds commenced. • 2000 - Dedicated Primary Dealers wereappointed • 2000 - Primary Dealer supervision commenced.

  4. Development of the Bond Market contd... • 2001 - US Dollar denominated Sri Lanka Development Bonds were issued. • 2002 - Fiscal Management Responsibility Act was enacted. • 2003 - Issue of 10,15 & 20 year Treasury Bonds commenced. • 2003 - Bloomberg Bond Trading System for Primary Dealers was introduced. • 2004 - RSSO,LTBO & MLA were amended to enable the trading of scripless securities. • Scripless Securities Settlement System (SSSS) and Central Depository System (CDS) commenced operations.

  5. Legal Framework (a) Appropriation Act - Authority for annual borrowing limit (b) Local Treasury Bills Ordinance - Issuence of T-Bills (c ) Registered Stock & Securities Ordinance - Issuence of T-Bonds & Rupee Loans (d) Foreign Loans Act - Borrowing from foreign sources (e) Monetary Law Act - Debt management as a function of Central Bank (f) Fiscal Management Responsibility Act - Guidelinesand debt sustainability

  6. Organizational Framework • PARLIAMENT - authority to borrow and accountable to the public • MINISTER OF FINANACE - delegates authority to Central Bank • MINISTRY OF FINANCE / TREASURY-Principal - authority & accountability - Contracting non-commercial foreign borrowing • CENTRAL BANK - Agent - Iisuence and debt service • PRIMARY DEALERS - market making • BANKS, PENSION/PROVIDENT/INSURANCE FUNDS - Investors and Secondary Market Dealers

  7. Implementation of the Government Securities Programme • Preparation of the borrowing calendar • Release of information to the market • Regular meeting of the Debt Management Committee ( weekly) • Regular meeting with Primary Dealers (weekly) • Issuance of domestic debt: e.g. Auction, Tap, Placements

  8. Organization of Public Debt Department • Front Office - market/public relations, primary issuance, market information, investor awareness • Middle Office - research inputs, risk analysis, issuance techniques, product development, database • Back Office - payment and settlement, servicing of concessional foreign debt, CS-DRMS • Support Services- human resources, training, IT support, maintenance.

  9. Budget Deficit and Borrowing Requirement (as a % of GDP) 19972000 2003 • Total Revenue 18.5 16.6 15.7 • Total Expenditure 26.4 26.7 23.7 • Overall Deficit - 7.9 - 9.9 - 8.0 • Finanacing 7.9 9.9 8.0 Foreign 1.9 0.4 2.9 Domestic 3.4 9.4 4.5 Other/Privatization 2.5 0.1 0.6

  10. Secondary Market - - Participants - Ownership Structure - Taxation Policy - Yield Curve

  11. Bond Market Infrastructure • Online Electronic Bidding System • Real Time Gross Settlement System • Scripless Securities Settlement System • Bloomberg Bond Trading System • Colombo Stock Exchange - DEX System

  12. Transaction Numbers and Volumes of the SSS System Source:CDS,PDD, Central Bank of Sri Lanka

  13. Growth of Depository Accounts of CDS Source: CDS,PDD,Central Bank of Sri Lanka

  14. Regulatory Framework • Licencing of Primary Dealers • Primary Dealer Supervision - On Site Examination - Off Site Surveilance • Regulations, Directions and Guidelines

  15. The End Thank You !

More Related