Objectives
To harmonize its procedures with the new practices of the electronic money market, the Ministère des Finances du Québec (MFQ) introduces its transactional service for Treasury bill auctions.
The first objective of the new online auction procedure is to reduce the market risk borne by bidders between the time bids are submitted and the time the results are announced.
The second objective is to facilitate the auction process and make it more secure. This leads to faster disclosure of results so that the capacity for secondary distribution among participants is more equitable.
This initiative is based on the guidelines on online bidding standards and procedures for electronic bidding for money market securities, released by the Investment Dealers Association of Canada (February 2001).
Security
A user name and password are assigned to each authorized institution wishing to bid on a bill, allowing it to access the electronic bidding system.
The bidding institution is responsible for the use and confidentiality of the password provide. In the event of any doubt as to its security, the bidder's password may be changed upon request. The institution is responsible for the actions of the persons authorized to use the user name and password. In the event of unauthorized use of the electronic system, the institution shall be held responsible.
The bidding institution is responsible for the transmission of data carried out with the assigned user name and password.
Bidders
The bidders authorized to proceed to auction are the financial institutions chosen by the MFQ.
Terms and conditions of participation
The features of the financial products are identical to those specified in the Québec Treasury bills Call for Tenders.
The Treasury bills offered for the current year are available for consultation under the Calendar heading in the main menu on the home page.
The Minister of Finance of Québec wishes to inform you that unconditional bids for the Treasury bills mentioned below ("Treasury bills"), issued pursuant to the Financial Administration Act and an order-in-council of the Québec government, will be received from participating bidders until 10:30 a.m. (Eastern Standard Time) on the day of the auction.
Each bid must be for a minimum of $100 000 in Canadian currency or for any whole multiple thereof and must quote the price per $100 to no more than three decimal places.
The MFQ reserves the right to accept or reject all or part of any bid received. Bidders will be advised of the acceptance or rejection of their offers at 11 a.m. (Eastern Standard Time) on the day of the auction. The MFQ may, at its discretion, announce the results earlier and confirm them in a press release.
The Québec government will pay no commission for the issue of Treasury bills.
Bid limits
The total value of the bid amounts may not exceed the total value of the amount at auction.
The number of bids submitted may not exceed eight purchase offers.
Bidding period
Each bidder may enter or change his bids within 30 minutes prior to the auction closing time.
All bids received at the closing time will be considered valid.
The institution whose bid is received at the closing time, if successful, shall be required to purchase and pay for the Treasury bills up to the amount of its bid.
After the closing time, no changes may be made.
In the event of a significant price error, the MFQ will contact the bidder concerned to bring the price of its bid in line with market prices.
The bidder can print the details of their bid in the form of a report. This report will be available under the History heading in the Bid menu and will display the time of entry of each bid.
After closing time, the bidder may consult the report to learn whether their bid has been accepted as well as the terms to maturity, periods, prices, yield(s) and face value(s) accepted by the MFQ.
Though confirmed, the auction takes place on the basis of the prices received and not on the basis of yields.
Publication of results
The winning results of the auction are published on the site within thirty minutes of the closing time. They will be available on the Québec Treasury bills site under the Results heading in the main menu on the home page. The results will specify the prices, yields, terms to maturity and face values accepted by the MFQ. In addition, the general results will continue to be published in the usual media and on the current site of the MFQ.
History
The bidder may consult the history of their bids (winners and losers) under the History heading in the Bid menu.
Auction calendar
The auction calendar will be sent annually to each authorized participant. It will be available for public consultation under the Calendar heading in the main menu on the home page.
Exceptional situations: should it be necessary to change the time or date of an auction, an electronic notice will be posted under the Press Release heading in the main menu on the home page. Bidders will also be advised by phone. However, bids may only be recorded in the system on the basis of the changes made.
System outage
In the event that a computer system outage prevents bidders from accessing the Québec Treasury bills electronic system, they may contact the MFQ's operations desk to submit their bids. The contact information for the desk can be found under the Mail heading in the main menu on the home page.
The call must be made prior to the auction closing time.
If the outage occurs during the auction period and makes the system inaccessible, each bidder will be advised by phone of the replacement procedure.
Confidentiality
In accordance with industry practices, no information may be disclosed to any third party or parties regarding the bids received and the results as to the acceptance or rejection of these bids by the electronic auction system.