Operational Notice - South African Reserve Bank

SA RESERVE BANK2.5.2 When accessing their CRAs, banks have to differentiate whether such actionsare either for the updating of balances according to Form DI 310 or forrefinancing purposes (i.e. averaging). The following rec codes (SAMOSdescription code for each transaction submitted) should be used:MDRES – for updating balances according to Form DI 310; andMDCRA – for refinancing and/or averaging purposes.2.6 Reserve Bank debentures2.6.1 The Reserve Bank issues its own debentures with maturities of up to 91days to drain excess liquidity from the market. Market participants areinvited to offer cash to the Bank on a tender basis (see Appendix VI). Bids(expressed to the nearest 0,005 per cent) are either submitted via SWIFT,the Money Market Internet System (MMIS) or by submitting original tenderforms at the Reserve Bank’s head office or any of its branches. Specialarrangements can be made to submit bids telephonically, but priorapproval is required from the Financial Markets Department in Pretoria.2.6.2 South African Reserve Bank debentures qualify as liquid assets and are issuedas an interest bearing instrument. The yield on debentures is calculated on aninterest add-on basis and the maturity value includes interest.2.6.3 The Reserve Bank reserves the right to reject individual tenders and toaccept individual tenders in part.2.6.4 Certificates are not issued as Reserve Bank debentures are fullydematerialised. More information on administrative procedures regardingdebenture tenders and the transfer of ownership can be obtained from theReserve Bank’s web site: www.reservebank.co.za.3. Eligible securities3.1 List of eligible securities3.1.1 The Reserve Bank accepts and uses the following instruments in itsrepurchase and reverse repurchase transactions and as collateral for themarginal lending facility:- Rand denominated Government bonds- Treasury bills- Reserve Bank debentures- Land Bank bills- Coupon and principal STRIPS of government bonds3.2 Definitions3.2.1 Government bonds are fixed-interest bearing securities issued by thecentral government under the Public Finance Management Act (No. 1 of1999) and constitute evidence of debt of the Republic of South Africa andtherefore represent a charge on the revenues and assets of the Republic.3.2.2 Treasury bills are short-term debt obligations of the central government andrepresent a charge on the revenues and assets of the Republic of SouthOPERATIONAL NOTICE5