Auction Safeguard

The primary aim of SGS issuance is to develop Singapore's debt capital markets, as SGS serve to provide a benchmark yield curve for corporate issuances. Although SGS auctions are fully underwritten by primary dealers, the SGS market is not immune from global developments.

The auction safeguard mechanism enhances the resilience of the SGS primary auction system by allowing MAS to vary its subscription amount to offset unexpected changes in investor demand. Where the auction cut-off yield is more than 25 basis points below or above the market yield, MAS may subscribe for a lower amount in an unexpectedly strong auction or a higher amount in an unexpectedly weak auction. In this manner, the auction safeguard will help to mitigate the risk of volatility or disorderly adjustments in the secondary SGS and broader Singapore dollar corporate debt markets.