Monday, September 3, 2007

Primary Dealers - Business Concept and Regulation

Download the master circular dated 2nd July 2007 of RBI for Primary dealers activities from:

Who are Primary Dealers & Satellite Dealers?

Primary Dealers / wholesalers of government securities can be loosely referred to as Merchant Bankers to Government of India, comprising the first tier of the government securities market. These were formed in the year 1996 to strengthen the market infrastructure and put in place an improvised and an efficient secondary market trading system.

What role do Primary Dealers play?
The role of Primary Dealers is to:
Commit participation as Principals in Government of India issues through bidding in auctions
Provide underwriting services
Ensuring subscription to the above issues through obligatory maintenance of success ratio levels
Market making by way of offering firm or indicative buy - sell / bid - ask quotes on daily basis
Commit secondary market turnover
Popularize G-sec among common public through retail trading to widen the scope
(From Gilt Securities Trading Corporation Ltd. A subsidiary of Canara Bank Ltd., India)

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