1.0
INTRODUCTION
1.1 PURPOSE
Unless otherwise specified in a Notice, these General Conditions
of Issue and Redemption of Treasury Bills and Central Bank Bills
(the “Conditions”) including the appendices, regulate
the issuance and redemption of Treasury bills and Central Bank bills
and any other securities issued by the Government of The Gambia
that, by the terms of the Notice, are made subject to these Conditions.
1.2 TERMINOLOGY
“Auction” means a bidding process
that the Central Bank uses to allocate and sell Treasury bills and
Central Bank bills.
“Bid” means an offer to buy a stated
face value of Treasury bills or Central Bank bills in an auction.
“Bidder” means a person or entity who
bids in an auction.
“Book Entry” Treasury Bills will be issued in “book-entry”
form. This means that, the electronic record of holdings of securities
kept by the Central Bank will be adequate proof of ownership of
Treasury Bills by the registered owner.
“Book Value” is the face value of securities less any
discount amount.
“Business Day” means any day other than weekends and
public holidays when the Central Bank is open to provide all or
substantially all of its banking functions.
“Call” means redemption, of a security, in whole or
in part prior to maturity.
“Central Bank” means the Central Bank of The Gambia.
“Central Bank bills” are securities issued at a discount,
are redeemed at their face value at maturity and have maturities
of not more than one year. Central Bank bills are direct obligations
of the Central Bank of The Gambia. They are issued under the Central
Bank of The Gambia Act 1992, and are subject to these Conditions,
and the applicable Notice.
“Conditions” means these General Conditions of Issue
and Redemption of Treasury Bills and Central Bank Bills and any
appendices and supplements as amended from time to time.
“Discount Rate” means an annualised rate of return to
maturity on bills based on the face value of the bill (see Appendix
A for an example).
“Face value” means the stated value of a bill at original
issuance.
“Issue date” means the date on which a bill is issued,
interest will begin to accrue from that date.
“Maturity date” means the date on which a bill becomes
due and payable and stops earning interest.
“Multiple-price auction” means an auction in which each
successful bidder pays the price at which they bid.
“Notice” means an offering announcement.
“Public Offering” means the face value of securities
offered to the public in an auction. This amount is specified in
the Notice.
“Security” means a Treasury bill or Central Bank bill
as described in these Conditions or any other obligation issued
by the Government of The Gambia or the Central Bank, that by the
terms of the applicable Notice, is made subject to these Conditions.
“Treasury bills” are securities issued at a discount,
are redeemed at their face value at maturity and have maturities
of not more than one year. They are direct obligations of the Government
of The Gambia. They are issued under the laws of The Gambia and
are subject to these Conditions, and the applicable Notice.
“Yield” means an annualised rate of return to maturity
on bills based on the book value of the bill (see Appendix A for
an example).
1.3 AUTHORITY
Gambia Government Treasury Bills, are issued and redeemed at the
Central Bank of The Gambia (hereinafter referred to as “Central
Bank”) as from July 16, 1986 under the Local Loans Act 1963
as amended by the Local Loans (Amendment) Act 1977 and by Resolution
of the House of Representatives on July 4, 1986.
Under Section 54 b (iii) of the Central Bank of The Gambia Act
1992, the Central Bank is authorised to issue securities acknowledging
indebtedness of the Bank having such terms and conditions as the
Board shall determine and to trade in such securities.
1.4 THE ROLE OF THE CENTRAL BANK
The Central Bank, as fiscal agent of the Government of the Republic
of The Gambia and on its own behalf is authorised under Sections
43, 46 and 50 of the Central Bank of The Gambia Act 1992 to conduct
all activities necessary to carry out the actions contained in these
Conditions and any Notice.
2.0 BIDDING
2.1 FORM OF ISSUE
Treasury bills and Central Bank bills will be issued in “book-entry”
form. That is, the electronic record of holdings of securities kept
by the Central Bank will act as adequate proof of ownership of securities
by the registered holder. However, the Central Bank will provide
a statement of holdings to investors upon request.
2.2 FREQUENCY OF ISSUE
Securities will normally be issued on a weekly basis or as may be
determined by the Central Bank from time to time. A tentative calendar
is available at the Banking Services Department of the Central Bank.
2.3 DAY OF NOTICE AND AUCTION
The Central Bank will invite tenders for the sale of bills by issuing
an offering announcement called a Notice in a form similar to Appendix
B. The Notice lists the amount offered, auction date, issue date
and type of security. The Notice and these Conditions will govern
the conduct of the sale. In the event of any conflict between the
Notice and the Conditions, the former prevails. Both the Notice
and auction will take place every Wednesday or on any other day
as the Central Bank may determine.
2.4 TENDERS
Tenders must be submitted directly to the Central Bank of The Gambia.
Tenders must be made on the white coloured form MM 0001A (for competitive
bids) and on the blue coloured form MM 0001B (for non-competitive
bids) available at the Banking Services Department of the Central
Bank. Tenders should provide the information requested on the application
forms. Incomplete tenders or tenders that are not on the prescribed
form may be accepted or rejected at the option of the Central Bank.
Tenders not received at the stipulated time will be barred from
the auction. Bids for Treasury bills and Central Bank bills are
binding on the bidder after the closing time specified in the Notice.
The Central Bank or the Government of The Gambia will not be responsible
for delays, errors or omissions in the submission of tenders.
2.5 AMOUNT OF TENDER
Each tender must state the face value of bills bid for and must
be for a multiple of D2,500 with a minimum of D2,500.
2.6 COMPETITIVE BIDS
All bids above D100,000 must use competitive bidding procedures.
In a competitive bid, the investor bids to purchase a stated face
value of bills at a specified price. The bid must show the price
offered for each D100 tendered. The price should be quoted in Dalasis
and Bututs to the exclusion of fractions of Bututs. Bidders may
submit tenders at different prices but each tender will be considered
on an individual basis. There is no limit to the maximum amount
an investor may bid for competitively. Competitive bids could be
rejected or only a portion of the bid may be awarded. The Central
Bank will sell Treasury bills to competitive bidders through multiple-price
auctions where successful competitive bidders are awarded Treasury
Bills at a yield that equals the price bid they submit.
2.7 NON COMPETITIVE BIDS
All bids of D100,000 and below must use non-competitive bidding.
In a non-competitive bid, the investor agrees to buy securities
at the weighted average yield of accepted competitive bids. In return,
he/she is guaranteed a bill. Investors bidding non-competitively
for their own account will be prohibited from bidding competitively
for their own account in the same auction.
2.8 DELIVERY OF TENDER
Each tender should be enclosed in a sealed envelope addressed to
the Senior Manager, Banking Services Department, Central Bank of
The Gambia, and marked on the outside “Treasury bills”
or “Central Bank bills”. To prevent misdelivery or delay,
the sealed envelope should be deposited in the Tender Box provided
for the purpose in the Banking Hall of the Central Bank. It is advisable
not to send tenders by post or deliver them to staff of the Central
Bank.
2.9 RESPONSIBILITY FOR PAYMENT
By bidding for a security, a bidder agrees to pay the book value
for any securities awarded to it in an auction.
2.10 CERTIFICATIONS
By bidding for a security, a bidder is deemed to have certified
that it agrees with these Conditions and the applicable Notice.
Further, the bidder is deemed to have certified that the information
provided on the tender is accurate and complete.
3.0 AUCTIONS AND SETTLEMENT
3.1 ACCEPTANCE
The Central Bank of The Gambia reserves to itself the right to accept
any portion of the tender or the whole of it and the right of rejecting
any or all tenders without assigning any reason whatsoever.
3.2 AUCTION PROCESS
The Central Bank determines which bids to accept at a meeting held
after the closing time for receipt of bids. The Central Bank first
accepts in full all non-competitive bids. It then accepts competitive
bids starting with those that offer the highest prices (lowest yields)
until it reaches the amount of the public offering. Bids at the
lowest accepted price will be prorated in the event that the issue
is oversubscribed. That is, a percentage of the bids received at
the lowest accepted price will be awarded to bidders who bid at
that price.
3.3 ANNOUNCEMENT OF AUCTION RESULTS
The Central Bank will make an official announcement, through a press
release, of the auction results after the auction is concluded.
The press release may contain information such as the amount of
the public offering, the amount of bids accepted, the weighted average
yield and any other information that the Central Bank may deem necessary
to include.
3.4 NOTICE OF ACCEPTANCE
The Central Bank will provide notice of awards to bidders whose
bids are successful as early as possible after the date of tender.
3.5 MODE OF PAYMENT
Payments will be accepted in the form of cash, personal cheques,
banker’s cheque, Central Bank payment order made payable to
the bidder, proceeds of maturing securities and for banks, by authorised
debit to their accounts at the Central Bank. Where payment is made
by cheque, such cheques should be drawn in favour of the Central
Bank of the Gambia. Treasury bills or Central Bank bills maturing
on the same date will be accepted in full or part payment of the
amount due.
3.6 DATE OF SETTLEMENT
Payment of the amount due in respect of accepted tenders must be
made in full before 09.00 a.m. for cheque payments and 12.30 p.m.
for cash payments on the date of issue of the bills or as specified
in the Notice.
3.7 REMEDIES FOR FAILURE TO PAY
When a person or an entity fails to pay for the securities awarded
to it, the Central Bank will determine an appropriate remedy This
may include barring that person or entity from participating in
future auctions for a certain length of time.
4.0 TRANSFERS AND SECONDARY MARKET
4.1 TRANSFERS
Treasury Bills are transferable at the Central Bank, 1 / 2 Ecowas
Avenue, Banjul, The Gambia by instrument in writing in any usual
or common form, without charge and stamp duty.
4.1.1 Procedure
On an approved Central Bank form similar to Appendix C, the owner
must authorise the transfer of the security from the owner’s
account to a buyer’s account. The authorisation of the transferor
for the transfer of the securities shall be irrevocable after the
transfer has been made to the new owner’s account.
The Central Bank will not be liable for any loss which the transferor
may incur as a result of the transfer or the inability of the Central
Bank to complete the transaction.
4.1.2 Death
Upon the death of an owner, succession shall be determined in accordance
with the Laws of The Gambia.
If a security is registered in the name and title of a governmental
officer or other organisation’s officer who has died, resigned
or been removed, succession shall be determined in accordance with
applicable law.
If a security is registered in the name of a partnership that has
been dissolved or terminated, succession shall be determine in accordance
with applicable law and the terms of the partnership agreement.
If a security is registered in the name of a company or an unincorporated
association that has been dissolved, merged or consolidated into
another organisation, succession shall be determined in accordance
with applicable law and the terms of the documents by which the
dissolution, merger or consolidation was effected.
4.2 OUTRIGHT PURCHASE
The Central Bank may, on any business day, purchase securities in
multiples of D2,500 before maturity, at the request of the holder,
by re-discount at a rate of 3 per cent above the average yield of
the last issue of Treasury Bills or at any rate as may be determined
by the Central Bank.
4.2.1 Procedures and Liability
On an approved Central Bank form similar to Appendix D, the owner
must authorise the sale of the security to the Central Bank. The
authorisation of the seller for the transfer of the securities shall
be irrevocable after the transfer has been made to the account of
the Central Bank.
By agreeing to sell the securities to the Central Bank, an investor
agrees to accept the price as determined by the Central Bank.
The Central Bank and the Government of The Gambia will not be liable
for any loss which the seller may incur as a result of the sale
or the inability of the Central Bank to complete the transaction.
The Central Bank and the Government of The Gambia shall not be
liable for changes in market conditions affecting the price received
for the security, or for any loss the seller may incur as a result
of the transaction or the inability of the Central Bank to complete
the transaction.
4.3 OUTRIGHT SALE
The Central Bank will, on any business day, sell Treasury Bills
in multiples of D2,500 before maturity, at the request of the buyer
and subject to availability from its own holdings, at a rate of
1 per cent below the average rate of the last issue of Treasury
Bills or at any rate as may be determined by the Central Bank.
4.3.1 Procedures and Liability
On an approved Central Bank form similar to Appendix D, the buyer
must authorise the purchase of the security from the Central Bank.
The authorisation of the buyer for the purchase of the securities
shall be irrevocable after the transfer has been made to the account
of the buyer.
By agreeing to buy the securities from the Central Bank, an investor
agrees to pay the price as determined by the Central Bank.
The Central Bank and the Government of The Gambia will not be liable
for any loss which the buyer may incur as a result of the purchase
or the inability of the Central Bank to complete the transaction.
The Central Bank and the Government of The Gambia shall not be
liable for changes in market conditions affecting the price paid
for the security, or for any loss the buyer may incur as a result
of the transaction or the inability of the Central Bank to complete
the transaction.
4.4 DATE OF REPAYMENT
Treasury bills and Central Bank bills are repayable on their maturity
date. If this date falls on a public holiday, the bills will be
repaid on the next succeeding working day. The full face value is
due on maturity day. The Government of The Gambia may, at any time,
redeem any security, in whole or in part, prior to maturity. In
the event securities are redeemed before their maturity date, accrued
interest calculated from the issue date to the redemption date plus
the book value of securities will be paid to the investors.
5.0 RESERVATIONS
The Central Bank reserves the right to accept or reject any or all
bids submitted under these rules. The Central Bank also reserves
the right to award more or less securities than the amount of securities
specified in the Notice. The Central Bank also reserves the right
to waive any of the rules for any or all bidders.
The Central Bank may from time to time amend these Conditions.
The Central Bank will endeavour to give reasonable notice of any
amendments, but reserves the right to introduce any amendment with
immediate effect, if necessary. The Central Bank may also vary or
omit any of the procedures described in this Notice on any particular
business day if deemed necessary.
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GENERAL CONDITIONS
OF ISSUE AND REDEMPTION OF TREASURY BILLS
AND CENTRAL BANK BILLS
PARTICIPATION
OF COMMERCIAL BANKS IN THE SECONDARY MARKET FOR
TREASURY BILLS AND CENTRAL BANK BILLS
GUIDELINES FOR
7DAYS DEPOSITS INSTRUMENTS
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