A common way for government or supranational bonds to be issued is through a publicly announced auction. Auctions involve multiple parties/participants including Issuers (debt management offices/agencies/treasuries), Primary Dealers, Dealers and Investors.
FMSB’s Statement of Good Practice for Participation in Sovereign and Supranational Auctions in Fixed Income Markets Transparency Draft (SGP) describes the way in which sovereign and supranational auctions are typically conducted in Europe, the roles Market Participants in those auctions play, the types of auction structure, orders and transaction types that are often utilised, and the different conflicts of interest that can arise for such Market Participants.
The SGP sets out a number of Good Practice Statements relating to the management of those conflicts and certain other matters relevant to the conduct of participants in and around such auctions.
This SGP applies to Primary Dealers, Dealers and Investors (as defined in the SGP) in the wholesale fixed income markets who participate in pre-announced multi-lateral auctions and reverse auctions conducted by issuers of government and supranational bonds in Europe (but subject to any applicable local regulatory restrictions), referred to in this SGP as “Market Participants”.