Commonwealth develops new software to help countries manage auctioning of government securities
The Secretariat’s software allows Central Banks or Ministries of Finance, which are generally responsible for auctioning of government securities, to manage the end-to-end auctioning process for the issuance of such securities in the primary market. It assists Central Banks or Ministries of Finance in decision making with regard to the allotment of securities to various bidders at a market clearing price based on the auctioning procedure of the issuing country. The system further allows debt offices to record securities issued through the auctioning route, as also comprehensively analyse the bids, competitive as well as non-competitive.
End to end auctioning
The two South Pacific islands are the first set of countries to use the new CS-SAS software, which boasts a workflow based system and rich analytics to help countries handle end to end auctioning process, from notification, through bid processing to electronic generation of allotment letters for successful bidders.
Daniel Haridi, Chief Manager at the Currency and Banking Operations Department in the Central Bank of Solomon Island, said the new system has proven to be of much benefit to the country.
“Prior to the installation of the CS-SAS, we used a local system simply for capturing the data and most of this was done manually and there was no analysis. Now that we are using CS-SAS we are able to perform a lot more functions because of the amount of information we are able to capture and maintain. We now have a comprehensive database and it allows us to do more analytical work,” Mr Haridi said.
More information
For more information on this system, please contact Sanjay Lollbeharree on +44 (0) 20 7747 6437 or s.lollbeharree@commonwealth.int
Mr Haridi also praised the efficiency of the new software. He noted that CS-SAS has improved the efficiency of the Central Bank’s operations in terms of managing the auctioning of securities.
“It certainly helps us to reduce cost and it is very effective. After a few weeks of implementing we found that we were able to effectively analyse the auctions. It really assists us in making decision faster.”
Lea Collins, Assistant Manager for Banking and Corporate Services at the Central Bank of Samoa (CBS), said: “The system, by offering a range of reports and analytic tools, will assist the Central Bank operate more efficiently in the auctioning of CBS securities and government bonds.”
Ms Collins believes that the new CS-SAS software will help the Central Bank to significantly reduce the time spent on processing these auctions. The new software (CS-SAS) has been especially useful in performing its function as the registry for CBS Securities and Government Bonds, by providing a single system to record the different auctions.
“To a wider extent, the capability of exporting data from CS-SAS to CS-DRMS [the Secretariat’s debt management software] will also enable the Bank to provide domestic debt information to the Ministry of Finance” Ms Collins said.
Accurate, transparent and informed management decisions
Arindam Roy, Head of Debt Management Section at the Commonwealth Secretariat said: “The software is a useful decision support tool to countries. The system has been designed to help debt managers make more accurate, transparent and informed management decisions in accepting bids for issuance of government securities. It not only ensures best price for the government based on the auctioning rules adopted thereby leading to borrowing cost efficiency but also ensures that such securities are allocated in a fair and transparent manner which is crucial to instil confidence among investors and broaden the domestic debt market as a source of sustainable finance for governments.”
Sanjay Lollbeharree, IT Team Leader at the Debt Management Section, said the CS-SAS significantly improves operational efficiency for countries involved in issuing securities. He noted that the system is specifically beneficial to small states, many of which have not yet invested in software to computerise their auctioning process. He added that the Secretariat will be releasing a supplementary product next year which would allow dealers to place bids online via the internet as an alternative to paper based bidding.
Although the system is principally designed to complement another hallmark project of the Secretariat, the Commonwealth Secretariat-Debt Recording and Management System (CS-DRMS), it can also be used with other debt management applications.
CS-SAS, like CS-DRMS itself, has been designed for ease of use. One week training is largely enough for managers to start making full use of the system. The software, as well as the training, are offered free of charge by the Secretariat to Commonwealth countries. Other countries can procure the software through the Crown Agents (UK) which is the official distributor of the Commonwealth Secretariat debt management software outside the Commonwealth.
