The Bank of Canada has announced several changes to its debt distribution framework, which will take effect in October.

In October 2004, officials from the Department of Finance and the Bank of Canada launched a review of the government ‘s debt distribution framework. The purpose of the review was to assess its effectiveness in raising stable, low-cost funding for the government and in supporting a well-functioning market for Government of Canada securities, and whether changes to the framework were warranted.

It found that the framework is generally working well. However, auction participation has become increasingly concentrated in recent years, with the government relying on fewer large dealers to cover the sale of securities. And, trading in the secondary market has also become increasingly concentrated.

As a result, it is proposing some modest changes to the framework to ensure its continued effectiveness and to promote fair and competitive participation at auctions. The changes fall into two broad areas: adjustments in auction access for dealers and customers, and changes to minimum bidding obligations of dealers.