The State Bank of Pakistan (SBP) has officially announced that starting next month, all auctions of government securities, including Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs), as well as buyback auctions and conventional open market operations (OMOs), will be conducted through its upgraded payment and settlement infrastructure, PRISM+.
This shift is part of SBP’s broader initiative to modernize Pakistan’s financial ecosystem and digitize core market functions. The central bank issued a circular notifying financial institutions of the procedural changes, highlighting that PRISM+ will become the primary platform for auction-based and secondary market transactions involving government securities.
PRISM+, short for Pakistan Real-time Interbank Settlement Mechanism Plus, serves as an enhanced infrastructure capable of supporting not only real-time gross settlement but also advanced trading functions such as buybacks, repos, and outright transactions.
Under the new system, all eligible institutions will be required to submit bids directly through PRISM+. Each bid must be accompanied by one or more government securities, which will be tagged to the submission. The face value of the bid will correspond to the face value of the offered securities.
The revaluation of securities will be carried out by PRISM+ using applicable rates, prices, and haircut values. If multiple securities are tagged to a single bid and a pro-rata allocation is required, those with the shortest remaining maturity or life will be prioritized for allocation, ensuring a systematic and transparent distribution process.
While conventional OMOs such as injections and mop-ups will be transitioned to PRISM+, Islamic financial operations like Shariah-compliant OMOs and Bai Muajjal transactions will continue under the current mechanism. Similarly, the central bank’s ceiling (reverse repo) and floor (repo) liquidity adjustment facilities will now operate through the TMON/X platform, another step in SBP’s technology-driven reforms.
Another significant feature of PRISM+ is its capacity to facilitate secondary market trading of government securities, including both outright and repo-based transactions. All government securities held in the SBP’s custody will now be available for market trading through this digital platform. This is expected to improve market efficiency, liquidity, and investor access.
Additionally, PRISM+ introduces a mechanism for “when-issued” trading of fixed-coupon PIBs. This means that market participants can now engage in trading PIBs even before their formal issuance through auctions. This is a notable development that aligns Pakistan’s market infrastructure with international best practices.
The SBP has encouraged all financial institutions and market participants to adopt the PRISM+ secondary market features to enhance participation, increase efficiency, and improve transparency in government securities trading.
This move to PRISM+ reflects SBP’s continued emphasis on strengthening the country’s monetary policy transmission mechanism, improving market liquidity, and supporting financial market development. By introducing digital platforms for critical financial market operations, SBP is laying the groundwork for a more responsive and transparent financial system that meets both domestic and international standards.