Role of primary dealers, Financial Management

Assignment Help:

Role of Primary Dealers

To promote the investment activity in the Government Securities market, several countries have adopted licensed Primary Dealers (PDs) as important intermediaries in the market. The typical responsibilities of PDs are:

  • Meeting the minimum bidding requirements,
  • Giving two-way quotes, and
  • Providing information of the market activity to the central bank etc.

In some instances PDs have special rights to different activities in the money market like primary auctions, or some special facilities in market operations, open market operations, underwriting commission etc. PDs have an important role to play in the development of the secondary market for government securities. The prices of PDs account for all the available information, they trade in the market, and also provide the central bank with the latest market information, and design new instruments, etc. The vital role of PDs in the market requires some regulatory control and the central banks periodically review the performance of PDs and make their operations performance-based. Rating of PDs as established in Poland is a laudable feature.

The RBI designed the system of Satellite Dealers (SDs) from 1996 as a second player in the Government Securities market after the PDs. The specific objective of SDs is to promote retail investments. However, the system could not prove as useful as expected and was eliminated.

 


Related Discussions:- Role of primary dealers

What is unsanctioned expenditure, Q. What is Unsanctioned Expenditure? ...

Q. What is Unsanctioned Expenditure? The expenditure, which is regularly incurred without the sanction of the competent authority or beyond the sanctioned limit of funds provid

Compare the ifrs and gaap revenue recognition policies, SUPERVALU INC . ...

SUPERVALU INC . , a large US retail grocer, had $36.1 billion in sales for its fiscal year ended February 25, 2011. SUPERVALU currently reports using US GAAP. The controller of

Multi-period compounding or else future value, Multi-period Compounding or ...

Multi-period Compounding or else Future Value :- If the company determination compounding interest half-yearly (semi-annually) instead of annually then investors will gain as he wi

Capital, Additional Paid in Capital - Amounts paid for stock in excess of ...

Additional Paid in Capital - Amounts paid for stock in excess of its PAR VALUE or STATEDVALUE. Furthermore, other amounts paid by stockholders and charged to EQUITY ACCOUNTS other

Define benefits of paying late, What are the benefits of “paying late” (but...

What are the benefits of “paying late” (but not too late) and how do companies attempt to do this? Since money has time value, the later cash is paid, but not as well late, the b

Money market mutual fund, Money Market Mutual Fund Even as the Mutual F...

Money Market Mutual Fund Even as the Mutual Funds show a promise of becoming a major instrument of household savings, another concept which is being talked about and waiting to

Current assets, A firm has $700 in inventory, $600 in fixed assets, $600 in...

A firm has $700 in inventory, $600 in fixed assets, $600 in accounts receivables, $800 in accounts payable, and $50 in cash. What is the amount of the present assets?

Maturity risk premium is zero, The actual risk-free rate is 4%. Inflation i...

The actual risk-free rate is 4%. Inflation is likely to be 3% this year and 4% during the next 2 years. We suppose that the maturity risk premium is zero. What is the yield on 2

Explain the capital market process, Question 1 State the key functions of ...

Question 1 State the key functions of the financial market. Question 2 Define "Bill of exchange". What are its features? Give different types of cheques. Question 3

Trial balances and bank reconciliation, Trial Balances: If the trial ba...

Trial Balances: If the trial balance does not result in a "0", the various records will need to be reviewed to pinpoint the spot where the unbalance occurred and any necessary

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd