Guidelines for Primary Market Issuance of Government of Sierra Leone Treasury Bills

GUIDELINES FOR THE PRIMARY MARKET ISSUANCE OF GOVERNMENT OF SIERRA LEONE TREASURY BILLS SEPTEMBER 2026

1. PRELIMINARY
   a) Authorisation
   In exercise of one of its functions as provided in sections 5(2)(b) of the Bank of Sierra Leone Act, 2019, "act as banker, adviser and fiscal agent of the Government," and section 65(1) of the aforementioned Act, (“the Bank”) hereby issues the following Guidelines. b) Primary Dealers Following the signing of the Primary Dealership Agreement, all Commercial Banks and Discount Houses shall be eligible to act as Primary Dealers (PDs) which shall perform the following functions:

• provide liquidity to the market by quoting effective one-way rate for
  Treasury Bills for outright purchases and sales;
• purchase the undersubscribed portions in auctions;
• participate actively in the Treasury Bills issuance programme;
• actively contribute to the development of the Treasury Bills market;
• Adhere to their obligations as stipulated in the Primary Dealership
  Agreement.

2. THE AUCTION COMMITTEE
   The Auction Committee shall be chaired by the Bank of Sierra Leone (BSL) and shall comprise five officials from BSL and one from the Ministry of Finance (MoF). The Committee discusses auction outcomes, takes final decision on the auction and confirms all auction results. The Committee reserves the right to increase or decrease the offer amount by not more than 10 percent, and to accept or reject bids without assigning any reason. However, the percentage may be varied based on government’s funds’ position.
3. PRIMARY MARKET PROCESS
   a) Auction Calendar
   An Auction Calendar prepared by the MoF shall be published at the start of each quarter. Pre-announcing the issuance of Treasury Bills reflects BSL’s desire for greater transparency and accountability. It also enables market players to effectively plan their investment in Government securities. Auctions for Treasury Bills shall be conducted every Wednesday at the BSL, except otherwise announced. b) Announcement For the information of the general public, a press release calling for bids shall be published on the Bank’s website and the local news media at least five days prior to each auction.

An announcement shall also be published electronically through the Central Securities Depository (CSD)/Scripless Securities Settlement System (SSSS) at least two days prior to each auction session for the information of commercial banks. c) Submission of Bids Commercial Banks shall submit their bids on behalf of themselves and their customers electronically through the CSD Platform held at the Bank of Sierra Leone, not later than 11:00hrs GMT on the day of the auction. Discount houses, insurance companies and Other Financial Institutions shall submit their auction bids signed by the authorised signatories in a sealed envelope, addressed to the Director of Financial Markets Department and marked on the outside “Treasury Bills Auction Bid(s)”. All bids shall be delivered to the Bank not later than 16:00hrs GMT a day prior to the auction. d) Bid Format Each bid submitted shall be a minimum face value of NLe5,000.00 (Five Thousand Leones) and thereafter in increments/multiples of NLe500.00 (Five Hundred Leones).

Bids shall be quoted in prices of not more than two decimal places (e.g. 81.0,
92.6 and 98.45).
e) Auction Allocation
The auction shall be conducted using the multiple price auction format. This implies that each successful bidder shall be allocated Treasury Bills at the price at which they bid. In addition, more than one bid per participant shall be allowed but at different prices. Bids shall be allotted in descending order from the highest to the lowest discount price that clears the amount put on offer. f) Eligible Participants Primary Dealers, insurance companies and other approved wholesale/retail participants that hold accounts with the Bank of Sierra Leone shall be eligible to participate in the primary auction. Other institutions and the general public wishing to acquire Treasury Bills in the Primary market shall do so by placing their bids through a Primary Dealer. Treasury Bills shall only be sold to applicants that have been registered and hold Securities account in the CSD.

g) Registration of Participants
All Primary Dealers and Other Financial Institutions (OFIs) shall be registered in the CSD/SSSS by the Bank, to obtain a unique identification number and a securities account number. First time participants of treasury bills in the non￾bank public category, shall be registered in the CSD/SSSS by a Primary Dealer and given a unique identifier code. h) Competitive Bids Applicants that submit a competitive bid shall be allotted with Treasury Bills only at the price quoted on the application. If bids at the cut off price exceed the face value of the remaining amount on offer, the remaining amount shall be prorated and allocated accordingly to bids at the cut off price until the amount offered for sale is exhausted. i) Non-Competitive Bids Submitting a non-competitive bid implies that the applicant shall be allotted Treasury Bills at the weighted average discount price derived from the successful competitive bids. Therefore, non-competitive applicants should only indicate the bid amount. Allotment of non-competitive bids shall be capped at an overall limit of five percent (5%) of each auction, with prorated allocation within this cap if necessary. However, the Auction Committee reserves the right to change the allotment mechanism as and when it deems necessary. j) Responsibility for Payment The responsibility to pay the cost for Treasury Bills awarded in an auction rest solely on the bidder. Participants shall therefore ensure that their accounts are adequately funded on the auction date. k) Auction Results Primary Dealers shall be able to view their own and clients’ successful bids on the CSD System upon completion of the auction. Results of other participants who are Non-Primary Dealers shall be delivered to the respective institutions not later than the day following the auction. The results of auctions shall also be announced for the information of the general public on the local media and on the Bank’s web site (www.bsl.gov.sl). The auction results shall include:

• Total amount supplied/issued at the auction;

• Highest Discount Price;

• Lowest Discount Price;

• Lowest successful Discount Price;

• Average Discount Price;

• Weighted average annual yield;

• Date of next issue and maturity;

• Offer Amount at next auction.
  l) Auction Postponements
  The Bank reserves the right to extend the bidding cut-off time or postpone an auction at any time, should any circumstance impair the integrity of the auction process. If an auction falls on a public holiday, the auction shall be conducted on the next Business Day, but the issue date will remain the same. An auction could also be postponed in the event of technical failure or natural disaster. m) Redemption of Security On maturity, investors shall be paid the face value (cost and interest) of treasury bills purchased at auction. The Bank shall credit the accounts of all PDs and OFIs, while accounts of the non-bank public shall be credited by their respective PDs through the SSS System on real time basis. n) Withholding Tax With the exception of Bank of Sierra Leone, commercial banks and pension funds, income earned from investment in treasury bills shall be subjected to 15 percent withholding tax on the interest earned at maturity, as per Government regulations. o) Oversubscription If an auction is oversubscribed, the decision to supply the total amount demanded is dependent upon the provisions available to the Auction Committee to accept or reject bids. p) Undersubscription On occasions where the market demands less than the full amount offered in the auction announcement, the undersubscribed amount may be redeemed by Government or issued to the Primary Dealers on a pro-rata basis. q) Commission A commission of 0.33 percent on successful bids at the auction shall be paid to the PDs on behalf of their clients.

4. SETTLEMENT
   a) Settlement Price
   The settlement price for Treasury Bills shall be calculated as follows; Settlement Price = (Price/100) * Face Value Example, if bid price is 98.5 and face value bid is 1,000,000 Then settlement Price = (98.5/100) * 1,000,000 = 985,000 b) Settlement Settlement of all Treasury bills transactions shall be T+1 and be done on the basis of Delivery Versus Payment (DvP). Successful bidders’ current accounts at

the Bank of Sierra Leone will be debited with the aggregate settlement price for all successful bids at the auction.

Successful bidders shall ensure that their current accounts are sufficiently funded to meet the settlement obligations arising for all successful bids. Settlement shall be done through RTGS and Temenous 24 (T-24).

The Auction Committee reserves the right to cancel Treasury Bills that are not fully paid for by a successful bidder. Where a bidder fails to pay fully for Treasury Bills on settlement day, the Bank may take punitive action against the bidder.
5. REVIEW AND AMENDMENT
At the discretion of the Central Bank these Guidelines may be reviewed and/or amended.
6. Effective date
These Guidelines shall be effective from the date of its publication in the Gazette. Money Market Division Financial Markets Department Bank of Sierra Leone