Bonded by a mutual goal
Members of the financial and political community gathered at the Australian Securities Exchange on Monday to celebrate something that should not have taken so long.
Finally, retail investors have the chance to buy exchange-traded Australian government bonds with the freedom of shares.
ASX chief executive Elmer Funke Kupper acknowledged that it might not be the best time to begin doing so given how low interest rates were.
But it was an important step towards building a foundation for the development of a corporate bond market.
For some in the crowd, it was better late than never. "It's a feeling of delight seeing so many years of work finally coming to fruition," said Rosemary Kennedy, the managing director of On-Market Bookbuilds. "But it's also a feeling of relief that it's actually happening."
Ms Kennedy worked for the ASX in the late 1990s as the national manager of interest rate markets. She had a team of five working "on the interest rate side of things", trying to get the retail Australian government bond market off the ground.
"But to get government bonds traded on the ASX we first had to change the Commonwealth Inscribed Stock Act (1911)," she said. "That was to allow the electronic transfer of government securities."
Peter Sheahan, from Curve Securities, said numerous legislative impediments had to be overcome to get to this point. "We've sort of spent 12 years looking at the legislative and disclosure hurdles ... and we had an antiquated settlement and transfer system in our past where the Reserve Bank only had one point of sale where one could buy and sell the [bonds]."
But now retail investors will be able to be access the bonds easily, and the trades will be CHESS-settled.
Three of the country's biggest financial houses - CBA, JPMorgan and UBS - agreed to become market makers for the bonds, providing continuous two-way pricing in all bond series. They have been given short-selling relief by the Australian Securities and Investments Commission.
"I hope that some of those investors who choose to add [these] to their portfolios will do so with a little patriotic frisson," Labor MP Dr Andrew Leigh said.
The exchange-traded AGBS will be quoted and transacted by the ASX, with each bond quoted as a gross price with a face value of $100. Trading begins on Tuesday morning.
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