NASDAQ OMX Riga has built ample expertise in organizing auctions of Latvian state-owned company shares and government bonds, including, among other, JSC Latvijas Gāze, JSC Latvijas Kuģniecība, JSC Latvijas Unibanka, JSC Ventspils Nafta. As to the latter, all state-owned shares were auctioned in the autumn of 2006, raising LVL 74.2 million to the government budget.

NASDAQ OMX Riga auction algorithms are applicable both to primary placements of equities and debt securities. The algorithms are flexible and can be adjusted to the specific needs of a company's issue auction or primary placement auction. 

Benefits and opportunities offered by NASDAQ OMX Riga auctions:

• primary placement is possible either for the entire issue or by tranche – depending on the market situation and the company;
• access to unlimited number of investors, resulting in the best selling price for the company, since the price is determined at an organized market;
• the auction infrastructure is integrated into the stock exchange regular trading system, consequently, is well-familiar to traders and convenient for use;
• transactions are made transparent;
• settlement for the auctions, the same as for secondary trading, is performed on a settlement system guaranteed by NASDAQ OMX Riga un Latvia Central Depository members and participants, and it is accustomed and known to the market participants. Settlement is easy and fast and safe for the customer. Moreover, apart from the standard T+3 settlement cycle, it is possible to set any other settlement date;
• yields and coupon formulas and calculations are ISMA-compliant (International Securities Market Association);
• apart from the technical aspect of the auction, NASDAQ OMX Riga provides marketing services with regard to the placement;
• information on the auction procedures and results is distributed via mass media and posted on the NASDAQ OMX Riga website.

Auction algorithms
 

1. Single price auction

As a result of the auction, bonds are sold at the highest price at which the demand is met. The bids by other auction participants are not disclosed.

2. Multi-price auction

The price bid by the participant is the key criterion, and each participant pays own bid price. Neither the bids by other auction participants nor the minimum price is disclosed.

3. Competitive multi-price auction

The price bid by the participant is the key criterion, and each participant pays own bid price. The bids by other auction participants are disclosed, but the minimum bid price is not known to the bidders.