among a significant segment of the securities market was a tool such as T-bills.What it is?What hides this abbreviation - T-bills?Explanation of the word means "short-term government bonds."Why do they need?
By the way, there is another option interpretation of this abbreviation - "T-bills of the USSR", deciphering which has nothing to do with the world of finance and means "the State Defense Committee of the Union of Soviet Socialist Republics."It will not go about it, namely the bonds.
initial release
What is ICT?Explanation of the term means that the paper is a prototype of bills that exist in the United States.Short-term government bonds are released on the territory of the Russian Federation in May 1993.Their role is to cover the state budget deficit.Since these securities in the financial system are classified as short-term, it is logical that they can not be used for long-term investment.The first issue of state short-term bonds (T-bills) was in the nominal ten thousand rubles, but pretty quickly raised to a nominal value of one million rubles.
income from bonds
What is the T-bills and some of their income?The investor makes a profit by selling short-term government bonds in the various auctions at a price that is below par (at a discount).These securities may be redeemed at par value with the help of money transfer to the account holder in a cashless form.Income in this case - is the difference between the price for the purchase of T-bills and their nominal value at the auction on the secondary market, or at their primary placement.
Who can buy short-term government bonds?
Individuals and legal entities may be owners of T-bills.However, the participation of individuals in the market turnover of these bonds is complicated by some purely technical reasons.The first issue of state short-term bonds GKO authorized to carry out all operations with them only through dealers who serve large financial companies and banks.They are mostly not interested in working with individual capitals.Many banks and financial companies set certain limits on the amount of funds that are necessary for investors to conduct transactions with bonds through a dealer.At the beginning of the ninety-seventh year, this amount was in the range of three hundred to five hundred million Russian rubles.
Release History
What does the term T-bills?Explanation of the name of the financial instrument, as we have already mentioned - "short-term government bonds."That's why they let for short periods of twelve, six and three months.In 1997, the issuer (Ministry of Finance) has changed the structure of the output of such a tool, as a short-term bonds, leaving in the course of the six-month and twelve- month only.Since T-bills, deciphering which focuses on short term actions produced alternating series, the issuer has the ability to conduct a systematic repayment of previously issued Series by issuing new ones.These bonds are zero-coupon, so the investor can buy them at a price below par.When placing a series of face value amount of the issue should be higher on the value of the discount, which is set during the auction realization of these securities.
Actions Ministry of Finance in respect of short-term bonds
Ministry of Finance of the Russian Federation carries out frequent and regular releases (emission) of T-bills.Explanation of abbreviations includes the word "state", as it was in the budget are the proceeds from the sale of these assets.Thanks to the policy of issued short-term bonds become such simple methods in the long-term, as the state always has a certain amount of borrowing.For example, in the ninety-fifth year from the sale of T-bills net revenues totaled nearly thirty trillion rubles.It is allowed to cover more than fifty per cent of the deficit of the federal government budget.In the ninety-sixth year of revenue from the cycle of short-term bond issues accounted for more than fifty trillion rubles.
Who are the participants of the market turnover of short-term bonds?
Abbreviation of T-bills, deciphering which we discussed above, has a wide range of market participants.The main subjects are:
- Ministry of Finance of the Russian Federation (Russian Federation), which is the issuer determines the price of the primary placement of bonds at auctions, the weighted average price forms, as well as the impact on production volumes.
- Central Bank of the Russian Federation (Russian Federation), which is the authorized agent of the Ministry of Finance on placement of T-bills.Also, the Bank of Russia conducts and organizes auctions on primary floatation of bonds, involved in the secondary auction, operates with securities on the open market.
- Dealer, ie conclude an agreement with the CBR professional bidders who serves ICT operations.The dealer may or may enter into transactions at his own expense, and to be a broker, executing transactions on behalf of their clients.
- investor, that is a physical and / or legal person who is not a dealer and buy government bonds on the basis of short-term agreement concluded with a specific dealer.
- Depository.T-bills, which involves deciphering non-cash form of release, have a two-tier system, which consists of sub-depositories (actually, it is the dealer) and head depository (the organization that has signed an agreement with the Central Bank of the Russian Federation to conduct the necessary depositary action to integrate short-term bonds).
