Bid Ratio = (Buys + Rolls - Sells) / SeriesSize
A variety of variable rate debt structures will trade on Clarity.
If bonds are issued with a liquidity provider, the liquidity provider will act as the Contractual Bidder on Clarity and will automatically and contractually bid for 100% of the bonds on each reset.
If bonds are issued without a liquidity provider, sellers are entirely dependent on the marketplace to provide liquidity.
Investors will bid for bonds through a competitive bid process. Successful bidders will receive the Clearing Market Rate (CMR). The CMR is the lowest rate that clears the market or the lowest rate at which the cumulative total of securities demanded (buyers) is equal to the total amount of securities available (sellers).
Each individual issuer of bonds will determine the frequency of pricing and the day of the week that their issue will price. It is expected that B-VRDOs will be largely issued in the 7 day mode. If the issuer, for example, determines that their deal will be a Monday reset, bond will always price on a Monday with the Rate Effective Date on Tuesday.
Primary trades will settle on a T+1 basis and will be cleared on an RVP/DVP basis through Industrial and Commercial Bank of China (ICBC). All reportable transactions through Clarity will be submitted to the MSRB's Real Time Transaction Reporting System within the required time frames.
All participants will see discrete orders with the number of bonds and the bid rate. Orders will be listed as Order 1, Order 2, etc. to retain the anonymity of the investors.
It depends on the product type. Current holders of B-VRDOs and B-TOBs are required to enter a bid rate on each Rate Reset Date. Certain market securities will allow for a market hold.
In order to access Clarity to purchase bonds you need to be signed up as a Subscriber. All institutional investors and dealers are eligible to be Subscribers on the Clarity platform.
Clarity does not charge investors or dealers a fee.
With the exception of routine maintenance or system failure, Clarity is expected to be accessible 24 hours per day 7 days per week. Bidding for each day's resets will commence at 8 a.m. and continuing until the bidding deadline.
Clarity is a Division of Arbor Research & Trading, LLC. Arbor is the broker/dealer for Clarity and the counterparty to all trades executed on Clarity.