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How It Works: Overview The OpenBook® auction is an Internet-based, uniform-price auction platform for originating and distributing debt securities. The auctions are open but anonymous and occur in a defined time window. Bonds are awarded to winning bidders at the clearing spread – the lowest spread over a selected benchmark Treasury security at which there is enough demand to sell all the bonds offered. Investors bid within the min/max spread set by the issuer before the auction. A time stamp on bids is used to award bonds to bidders tied at the clearing spread in the order they were received. Each investor gets a time stamp when his public bid is confirmed and accepted. These bids are shared anonymously with all auction participants on a real-time basis. Investors can improve their initial bids and retain their time stamps as long as the improvement is within a specified protected spread range, as set before the auction. These improved private bids are not shared with otherinvestors and are automatically entered at the end of the auction. Investors can always move their bids outside the protected spread range and receive new time stamps. A patent is pending on the OpenBook Auction System. OpenBook is a service mark of |