When-issued Market


A “when, as and is used, or commonly known as when-issued” market is a system created to enable bidders and issuer to guess how many investors will be interested in government bonds to be issued. Uncertainty of how much bidders will participate in bond auction has possibility to lead to volatility and consequent risks. However, by anticipating demand on government bonds to be issued in advance, it will give room for the government to efficiently respond to demand as well as enable investors to hedge related risks. When-issued market trade can only take place from two days before auction of government bond until the date of the auction.

Advanced economies including the US, UK, Japan and major emerging economies such as China, India and Singapore are operating when-issued markets. The Korean government, in December, announced a plan to introduce the system in the fourth quarter of this year.

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