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Noncompetitive Tender

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Noncompetitive tender
Offer by an investor to purchase Treasury securities at a price equivalent to the weighted average discount rate or yield of accepted competitive bids in a Treasury auction. Noncompetitive tenders are always accepted in full.

Noncompetitive Bid
One of two bidding processes for buying Treasury securities and some other debt securities, in which the investor agrees to purchase a certain number of securities at the average price of all competitive bids over a given time. The noncompetitive bid process allows smaller investors to buy Treasury securities in a market that would otherwise be dominated by wealthy institutional investors. The minimum price in a noncompetitive bid is $10,000.


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A comparatively large number of individuals and corporations submit noncompetitive tenders.
In addition, the maximum for noncompetitive tender awards for notes and bonds was raised from $1 million to $5 million; however, to ensure that noncompetitive awards were reserved for the smaller bidders for whom they were intended, noncompetitive bids were restricted to bidders having no positions in the when-issued, futures, or forward markets at the time of the auction and not submitting competitive bids.
Some depositors may also have turned to direct holdings of securities; one sign of such a shift was the $22 billion rise in net noncompetitive tenders for Treasury securities.
 
 
 
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