TAAPS

What Is TAAPS?

Treasury Automated Auction Processing System (TAAPS) is a computer network system developed by the Federal Reserve Bank to handle bids and tenders received for Treasury securities.

Treasury securities exchange through an auction cycle in the primary market. TAAPS gets tenders from brokers wishing to purchase marketable securities. Each bid is handled and looked into naturally by TAAPS to guarantee it conforms to the Treasury's Uniform Offering Circular.

How TAAPS Works

The Treasury Automated Auction Processing System (TAAPS) was developed to turn into the core of the operational interaction for the auctioning of Treasury securities. The U.S. Government sells securities through the Treasury Department and Federal Reserve Bank to fund-raise to fund the national public debt.

The Treasury Department approves Federal Reserve Banks to act as fiscal agents of the United States so they can carry out the announcement of the auction, the sale of the securities, and any applicable regulations. The auction is a bidding cycle in which the Treasury department sells debt securities. The auction's offering amount is the value of the Treasury, which is additionally called the bond's par value or face value.

The bidder is the person or party offering to buy the securities either without help from anyone else or through a financial institution. Ordinarily, institutional investors, including banks, brokers, dealers, investment funds, retirement funds, and pensions, foreign accounts, and insurance companies might bid on Treasury securities through TAAPS.

Benefits of TAAPS

TAAPS gives institutions direct access to U.S. Treasury auctions, by means of their computer, in which the system electronically gets and processes tenders. TAAPS permits institutions to purchase securities directly, decreasing or taking out intermediary costs. Be that as it may, individual investors don't approach TAAPS and must utilize Treasury Direct or go through an organization with access to TAAPS.

History of TAAPS

Treasury auctions started in 1929 with the auctioning of 3-Month Treasury Bills. From 1973 through 1976 the auction system expanded to incorporate bills, notes, bonds, Treasury Inflation Protected Securities (TIPS), and Floating Rate Notes (FRNs). Until 1993, bids were received in paper form and handled physically, which was a very tedious and inefficient cycle. The TAAPS system made the streamlined and efficient cycle expected to handle the developing volume of Treasury securities trades.

Utilizing Treasury Automated Auction Processing System

The following is a clarification of a portion of the means engaged with a Treasury auction in which TAAPS is responsible for the following:

Getting bids
Separating competitive and non-competitive bids
Positioning of competitive bids by expanding yield or discount rate
Preparing a summary of the auction results.

To utilize the TAAPS system, financial institutions must apply for an account. The application incorporates an agreement confirming that the institution isn't participating in fraud by trading Treasury securities and certification of authority that the contacts listed on the application have the power to utilize TAAPS for the organization.

When a TAAPS account has been laid out, institutions follow the distributed schedule of auctions of different Treasury securities. For each auction, the Treasury declares the following information:

Amount of the security being sold
Date of the auction
Issue date of the security
Maturity date
Terms and conditions of the purchase

Schedules of auctions additionally incorporate any applicable qualification rules and the close times for competitive and non-competitive bidding. Normally, a non-competitive tender is a bid generally made by a more modest investor, while a competitive tender is a bid made by a bigger, institutional investor.

The closely involved individuals submit bids, and at the closing times for those bids, TAAPS figures out the bids and awards them to bidders as per a set of rules planned both to fund the Treasury at the most reduced cost and to keep a competitive financial market. Winning not set in stone, who then submit tenders, and the securities are issued to the champs.

Features

Treasury Automated Auction Processing System (TAAPS) is a computer system utilized developed to auction Treasury securities.
Each bid is handled and checked on consequently by TAAPS to guarantee it follows regulations.
TAAPS gets bids and tenders from brokers and institutional investors who need to purchase marketable securities.
TAAPS permits institutions to purchase securities directly, diminishing or disposing of intermediary costs.