Government Bonds Available On Exchange For First Time Small investors in search of fixed-income assets will soon have a new option: government bonds. The Australian Securities Exchange today said Commonwealth government bonds will be listed on its exchange by 21 May. For the first time retail investors will be able to buy and sell bonds on the open market. The move will give retail investors direct access to the multibillion-dollar secondary market for government bonds, and eventually, should spur on a retail market in corporate debt as well. Until now, investing in government bonds was difficult for retail investors, as it required large amounts of capital or going through a managed fund. Australia is one of only eight countries that has a top-notch AAA rating on its government debt. Fixed-income investments have lower returns than equities, but are considered less risky. The ASX has been working with the government to give retail investors more opportunity to buy the assets, which offer investors a fixed return and the opportunity to diversify away from equities-heavy portfolios. It is also hoped the move will spur on Australia's nascent corporate bond market, giving companies an alternative source of finance to borrowing from banks. The benefits of a retail government bond market are significant, allowing retail investors to diversify their savings and providing an important foundation for the development of a corporate bond market. These benefits will help improve Australia's economic competitiveness," the chief executive of ASX, Elmer Funke Kupper, said. Treasurer Wayne Swan this year introduced legislation making it simpler for listed companies to issue bonds to small investors, by cutting the disclosure requirements and limiting director liability. "A more vibrant retail corporate bond market will provide Australian business with an alternative funding option, adding competitive pressure in the business lending market," a statement from Mr Swan's office said. ASX estimates the change will increase the amount of ASX-listed fixed income assets eight-fold, from $35 billion to $280 billion. Under the new arrangements, investors will be able to buy and sell government bonds in a similar way to how shares are traded. Each exchange-traded treasury bond would have a face value of $100 and would give their owner regular interest payments every six months and repayment of principle on maturity, government document say. Bonds on offer would have a range of maturities extending up to 15 years. Treasury bonds are not traded on an exchange currently, and are typically bought and sold in large volumes, putting them beyond the reach of retail investors. Australian retirement savings funds have a much higher weighting towards "growth" assets such as shares than most countries overseas, and many experts including former Treasury Secretary Ken Henry have argued in favour of fixed-income assets, such as corporate bonds, to play a bigger role in Australia.