THE Bureau of the Treasury (BTr) has again postponed to February 2, 2015, the scheduled implementation of the nonrestricted trading of government securities between tax-exempt and taxable entities.
National Treasurer Rosalia de Leon moved the target date of implementation for the trading of government securities a month later from January 5, 2015.
“To conclude market-preparedness activities leading to the full implementation of the subject initiative, please be informed that the going live date for non-restricted trading and settlement environment will now be on February 2, 2015. A detailed schedule of activities will be issued separately by the bureau for market participants’ compliance,” de Leon said in a memorandum.
This represented the second time the target live date was moved from the original target live date of November 24, 2014.
Under the nonrestricted trading between tax-exempt and nontax-exempt entities, government securities may already be traded across tax categories.
The BTr said this would benefit tax-exempt institutions by allowing them access to price-discovery strategies enjoyed by the active taxable sector of the market.
Full market access by either taxable and tax-exempt entities on the trade of government securities help deepen the local securities market and provide additional liquidity to the tax-exempt sector.
The nonrestricted trading requires the BTr to use a system approved by the Bureau of Internal Revenue (BIR) to track the tax liabilities on the transactions between tax-exempt and non-tax exempt buyers and sellers of government securities.
Revenue officials had previously hesitated on giving its assent to the nonrestricted trading of government securities proposal on fears that the transactions would not be properly taxed.
The BIR would later say they now have that ability or system to help them track each transaction and capture the necessary levy due the government.