Training

Only users with the Bidder role will be able to access the auction. Log in first and then from your User dashboard click on the ‘Bid in auction’ button. This will take you to the current auction. For details about upcoming auctions, please see the Auction noticeboard.

The ‘Bid in auction’ button will become available 24 hours before the bidding window opens. This is the warm up period and will allow you to test your connection and become familiar with the auction layout. During the warm up period you CANNOT place any bids.

Watch this auction video to see how bidding works:

Bidding

Bids are only accepted during the bidding window. This will always be 9am - 12pm on the day of the auction.

There are two ways to submit a bid:

1. You can submit a bid using the manual order form. This will place one bid at a time:

• Price
• Quantity
• Participant (you can nominate which participant this bid is for)
• Reference (optional)

2. You can submit bids by uploading a .csv file. Once in the auction go to ‘Manage Bids’ -> ‘Upload bids’. This must be a .csv file and follow the below format:

• Under the Participant column you must enter your Participant’s trading name
• Reference is optional. This is also treated as a unique identifier.

Example:

If you placed a bid, by uploading the .csv, for:

• 300,000 at $40.55 with a reference of “MyFirstBid”

Then changed your bid to:

• 300,000 at $39.00 with a reference of “MyFirstBid”

When you upload the amended file this bid would replace the previous bid.

The only limits to the amount you can bid is the amount of collateral lodged. Your maximum bidding amount is four times your eligible collateral.

Clearing Price Calculation

Auctions are single round, sealed-bid. Bids are collected during the bidding window and ordered from highest to lowest price.

The clearing price is set by the lowest bid price that accounts for the full auction volume. The auction will clear if the clearing price is equal to or higher than the confidential reserve price.

A bid at the clearing price may be partially filled to complete the auction volume available.

Scenario: 6M units for sale

If there are multiple bids at the clearing price, a tied bid situation:

• Each bid is prorated,
• Rounded down to the nearest lot,
• Any remaining lots will be assigned randomly.

Cost Containment Reserve

The cost containment reserve (CCR) is intended to help prevent the auction from clearing above prices the government considers unacceptably high.

This is done by selling more units (the reserve volume) into the auction if certain criteria are met. The reserve volume is available across the calendar year and will not roll over to the next calendar year.

Since December 2023, a two-tier CCR was established in the auction regulations. It reduces the risk of releasing all reserve units at once the two different price triggers release the corresponding number of NZUs allocated for that tier.

The following criteria must be met for the CCR volume to be released:

1. Bid volume is greater than the initial auction volume and;
2. The initial clearing price is at or above $173, for 2024. This will release tier 1 units.
3. If the clearing price is at or above $216, for 2024, this will release tier 2 units.

Tier 1 must always be activated first before tier 2.

Roll Over Example:

1. The March 2024 auction has 7,700,000 reserve units in total – split into 2,800,000 in tier 1 and 4,900,000 in tier 2.
2. During the auction the tier 1 CCR is triggered and 1,000,000 reserve units are sold. The second tier remains untriggered.
3. For the June 2024 auction there will be 1,800,000 reserve units available in the first tier and all 4,900,000 reserve units remain available in the second tier.

Important! If the CCR is triggered, the auction cannot clear below the trigger price.

Example:

• CCR triggered
• The bid setting the clearing price is the last bid above the CCR trigger price
• And bids below this price are not filled, even if there is volume to fill them.

Scenario: 6M units for sale

Tier 1 trigger price $80, 1M units available

Scenario: 6M units for sale

Tier 1 trigger price $80, 1M units available

Tier 2 trigger price $100, 2M units available