Rates in the market at end June of the last three financial years are shown in table 26.16. They are issued by borrowers at a discount to face value and carry no income payment other than the repayment of face value at maturity. To enhance liquidity, money market securities conform to standardised attributes concerning risk and discount rates. Because of the standardisation, the securities of different issuers are often combined in the one parcel of securities for trading purposes. The risk of default of a bill of exchange is reduced by an acceptor or endorser adding their name to the security for a fee.
Most bills of exchange traded in the market are bank-accepted bills.
Table 26.17 shows the amount on issue by sector of issuer and sector of holder of the various types of money market securities. Bond market Bonds are issued with original terms to maturity of one or more years. Usually the investors are paid a set periodic interest, called a coupon, for the life of the bond and receive their initial investment back at maturity. Some bonds have variable interest rates, some have principal repayments indexed, and there are small amounts of zero-coupon or deep discount securities which are issued at a discount to face value. Governments, trading enterprises and financial institutions issue bonds to finance long-term requirements.