The Tap facility, a functionality of the Telematico System, offers issuers the
possibility to execute their Tap-issues electronically.
The TAP facility replicates the same over-the-counter
procedures used in the traditional tap issue, while
providing greater level of operational efficiency and
transparency ensured by the centralised electronic
trading platform and the vast distribution network
of MTS
The Tap segment is a Single Price-maker segment
in which the issuer is the only participant with
the ability to insert offer prices in the security
it wishes to issue. The other institutions, specifically
the Syndicate or Primary Dealers of the issuer,
are admitted to the Tap and act as Price Takers.
These institutions are able to trade only with
the issuer and against the prices offered.
The Tap functionality of the Telematico, which
can be configured according to the described issue
and loan conditions, provides the issuer with the
necessary tools to successfully execute the tap.
The issuer can submit the price and size he wants
to reveal, as well as a 'blocked' size (hidden,
not visible to the other participants). Both revealed
and hidden sizes are firm at the specified offer
price and may be lifted by those who have access
to the tap. At any time, the issuer is able to
adjust or suspend its price or (hidden) size. Thus
the Telematico system enables the issuer to fine
tune the size and price of its issue and to make
the adjustments necessary in changing market circumstances.
The institutions participating in the Tap have
the possibility to continuously monitor the firm
offers of the issuer and - if the price is right
- have immediate execution and confirmation of
their orders based on a fair "first come, first
served principle" that electronic trading guarantees.
The system generates a straight-through processing
of clearing and settlement instructions once each
trade has been executed.
The Telematico system stores all information and
the issuer can be provided with a complete file
of all details of its Taps. This data, which includes
all price updates and executed trades, proves to
be an excellent tool for analysing the success
of the Tap.
The Tap functionality clearly brings advantages
to the issuer and Primary Dealers with respect
to transparency, equal access, operational efficiency
and speed. |
