Buying and Selling on the Secondary Market

In the secondary market, investor can purchase Government securities through any Government Securities Eligible Dealers (GSEDs) or financial institutions licensed by the Securities and Exchange Commission (SEC). Generally, an investor must have an existing bank account or investment account with his chosen dealer. An investor buying from the secondary market gets Confirmation of Purchase (COP) from the licensed dealers containing the complete description of the debt security purchased, (e.g., type, series, serial number, face amount, issue date, maturity date, yield, term, final tax, and purchase price). Dealers account for their transactions to clients by issuing Confirmation of Sales and Purchase and other documentary proof. Cash settlements for these purchases are in the form of manager’s or cashier’s check or by electronic transfer.

Trading starts at 9:30am local time and is predominantly conducted in the morning to meet cut-off times for settlement. Transactions done in the afternoon are settled the following business day.

Government Securities Eligible Dealers (GSEDs) and SEC-licensed financial institutions have no obligation to make markets and many do not make two-way quotes. Indicative secondary market prices for Government Securities are available on Bloomberg’s Mart1 page.

Different dealers may have differing payment and settlement arrangements, as they hold different arrangements for accepting and processing applications. Investors should check with specific dealers for application requirements, procedures, and details on fees.

Payment of Interest & Redemption

The Bureau of the Treasury automatically credits the Bangko Sentral ng Pilipinas cash settlement accounts of the Government Securities Eligible Dealers (GSEDs) on coupon payment date and maturity date of the security.

Interest Income and principal redemption of investors are collected through their chosen GSEDs or SEC-licensed dealers.

Reopening Issues

Reopenings are the offering of new securities with the same terms and conditions as an existing issue. They are used to increase the size of an outstanding issue. A reopened bond has the same maturity date, security identifier ,and coupon rate as the original security. The only difference is that they have a different issue date and usually, a different purchase price based on current market yields.