Fixed Income Market promises transparency in money market operations
Six institutions in the financial market have teamed up to establish the Ghana Fixed Income Market (GFIM) to provide a fair, orderly, transparent and efficient market for the transactions of fixed income and related securities in the country.
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The GFIM is the first of its kind in the country and was formed through a joint initiative of the Bank of Ghana, the Ghana Stock Exchange, the Central Securities Depository Ghana Ltd (CSD), the Ghana Association of Bankers (GAB), ACI Ghana (association of bank dealers) and Licensed Dealing Members (LDMs) of the Ghana Stock Exchange.
It is to help ensure real time settlement of securities, where transactions in the fixed income and secondary market will be linked together by the Bloomberg L. P. Cash system, an electronic system that facilitates real time settlement of transactions.
The Deputy Managing Director of the GSE, Mr Ekow Afedzie, said in Accra that the electronic system would replace the existing system, where price quotes and bids are often done manually, mostly through phone calls to interested parties.
The market is expected to go live for trading in June ending after which securities such as the Government of Ghana (GoG) treasury bills, notes and bonds and Bank of Ghana money market instruments will be admitted and traded on the GFIM, Mr Afedzie said
“In addition, quasi-Government of Ghana institutions’ money market instruments, notes and bonds, corporate notes and bonds, municipal and/or metropolitan bonds, supra-national bonds, repos, and other fixed income or money market securities may be admitted and traded on the GFIM,” he said.
He explained that the operations of the new market would be overseen by an 11-member committee, made up of representatives of the partnering institutions and chaired by the First Deputy Governor of the BoG.
On who qualifies to trade in the market, the DMD of the GSE said trading should be limited only by entities that were licensed by the Securities and Exchange Commission (SEC) to deal in securities.
Additionally, he said those institutions must have been authorised by the BoG as primary dealers (PDs), licensed by the BoG as banks or by the GSE as licensed dealing members (LDMs).
That notwithstanding, Mr Afedzie said the BoG, for monetary policy purposes, would be permitted to deal in GoG and Central Bank securities listed on the GFIM.