Bonds issued by the Australian Government are traded by institutions in the wholesale market. This market is one of the deepest and most liquid markets in Australia.
- The wholesale market determine bond prices in the exchange-traded market.
- The holder of an Exchange-traded AGB has beneficial ownership of an Australian Government Bond in the form of a CHESS depositary interest (CDI).
- CDIs link the wholesale and retail markets enabling retail investors to gain equivalent access to a range of securities normally traded exclusively in the wholesale market.
- Because an Exchange-traded AGB represents an interest in the underlying bond, the retail price should never move too far from the price in the wholesale market.