Singapore Government Securities (SGS) were initially issued to meet banks' needs for a risk-free asset in their liquid asset portfolios. Following efforts to enhance the efficiency and liquidity of the SGS market by MAS in 1998 as part of its strategy to develop Singapore as an international debt hub, the market has since grown significantly, making it one of the fastest developing bond markets in Asia. Currently, the SGS are issued primarily to:

Separate trading of principal and interests of SGS is currently not available. However, MAS has aligned the coupon payment dates (1^st of the month every 6 months) of all SGS bond issues to facilitate the stripping of SGS in future.

SGS T-bills and bonds are issued to the market via auctions. Auctions for the 3-month T-bills are conducted every Monday, with the rest typically taking place 3 business days before the respective issuances. Prior notice is published on the SGS website and advertised in the major newspapers generally one week in advance.

All SGS are auctioned using a uniform price auction. Successful bids (regardless whether it is competitive or non-competitive) will be allotted at the same uniform yield, which is the highest accepted yield (cut-off yield) of successful competitive bids submitted at the auction.

Summary Table on SGS Auction

At the beginning of the year, MAS will publish on its website an auction calendar specifying the dates on which SGS auctions will be held. Generally, MAS issues T-bills and bonds on a regular basis. The 3-month T-bills are issued weekly whilst the 1-year T-bills, and bonds are issued according to the pre-announced issuance calendar.

To participate in the SGS market, an investor will first have to open a SGS trading account with any of the participating banks (Primary or Secondary Dealers) in the SGS market (or in the case of an individual investor, an account with the Central Depository, CDP). As SGS are scripless, purchases and sales of SGS are reflected as book entries with the bank or the CDP respectively. To participate at primary auctions, an investor will need to submit bids through the PDs, or via Secondary Dealers who will then submit bids to the PDs, as only PDs are allowed to bid at SGS auctions. Individual investors do however have the additional option of submitting their bids directly via the ATMs of DBS, UOB and OCBC, who are themselves PDs in the SGS market. In the case of SGS bonds, individual investors with a CDP account may also choose to trade in the secondary market through their stockbrokers on the Singapore Exchange (SGX) with effect from 8 July 2011.

Total non-competitive allotments are subject to a limit of 40% of issue on offer, with pro-rated application if application exceeds this limit.

*Note – the maximum auction allocation limits under competitive bids for PDs and non-PDs include the amounts of non-competitive bids.

(More information on SGS Issuance and Auction Conduct)

Yes, there is currently an electronic bond trading platform available for use by PDs over the Bloomberg system.

As SGS are scripless, ownership of SGS is either reflected as a book entry in the investor's account with the bank, or the CDP for individual investors. Therefore, investors must open SGS accounts with any participating bank, either a Primary or Secondary Dealer of the SGS market, or the CDP, to facilitate the safekeeping and debiting/crediting of SGS. The banks maintain SGS book-entry accounts with MAS where their SGS holdings are custodised.

Trading volume in the SGS market has grown significantly over the years. From about S$816 million in 2000, the average daily trading volume had increased by nearly four-folds to S$3.29 billion in 2010.

The SGS repo market is active, with average daily trading volume rising from S$543 million in 2000 to S$1.86 billion in 2010. Primary Dealers are committed to quote continuous 2-way prices for repos under all conditions.