Brokers praise revamp of retail debt market

Friday 3rd August 2001

By Deborah Hill Cone

Brokers were yesterday welcoming new Stock Exchange regulations designed to make its little-known debt market "more vibrant."

The changed rules, which came into force on Wednesday, make it easier for brokers to settle trades for fixed-interest securities and are intended to promote the debt board, rather than the high-profile equities board.

The Stock Exchange has had a retail debt board for a number of years but a couple of months ago set up a taskforce to revamp it in an attempt to make it more liquid, get better pricing and compete with the trading banks.

"A lot of people were not terribly aware of the Stock Exchange debt market," taskforce member and CSFB director Graeme Beckett said.

"The whole aim and thrust of the taskforce was get a more liquid and vibrant debt market and increase awareness of the size of the market."

There are about a dozen issues trading on the board, including Telecom bonds, Montana capital notes, government and local authority bonds. They will be joined by the market's biggest capital note raising, GPG's $250 million issue, when it lists in September.

Among the changes to regulations are a move to a longer deadline before a broker is required to report a "marriage" (when a broker has both a buyer and a seller in their office and will marry the stock in house). Also, the settlement of trades has been extended from three days after trade to five days.

The Stock Exchange is trying to get debt trades on to a faster settlement system.

GPG issue rushed

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