Winterflood Securities Give Retail Investors Access To Auctions

Winterflood Securities have opened up primary market access for retail investors in gilts through two major retail investment platforms (Hargreaves Lansdown & Interactive Investor).

• This comes after the well-documented grab for fixed rates/bonds that has taken place as developed market central bank hiking cycles mature.
• Secondary market gilt demand had already swelled, largely owing to tax benefits for higher earners.
• Retail demand isn’t a UK phenomenon, with demand at retail-specific bond offerings in Italy and Belgium getting plenty of airtime in recent months.
• The DMO had previously flagged an examination of the “potential for retail investors to contribute more significantly to meeting the overall financing requirement.”
• The FT notes that the DMO head has said that the Office “very much welcome this collaborative, market-led initiative. We value the importance of having as diverse an investor base as possible and this initiative will provide retail investors with an additional opportunity to access gilts.”
• The process will start with next Wednesday’s GBP4bn offering of the 4.00% Oct-31 gilt.
• Hargreaves Lansdown write “clients will have until 16:00 the day before the auction to apply. This means that clients have 6 days to review the prospectus and submit an order. Our clients will receive the Average Accepted Price determined during the auction.”
• The Winterflood release on the matter can be found here.