Understanding Singapore’s Bond Market
Primary Dealers' Roles and Obligations
Primary dealers are banks in Singapore approved by the MAS to be market makers and dealers for Singapore Government Securities (SGS) and MAS-issued securities. Investors need to submit their SGS bonds, Treasury Bills (T-bills), Cash Management Treasury Bills (CMTBs), MAS Bills and MAS Floating Rate Notes (MAS FRNs) auction bids through a primary dealer.
Role of Primary Dealers
- Provide liquidity to the SGS bonds, T-bills, MAS Bills and MAS FRNs market by quoting two-way prices under all market conditions.
- Underwrite issuance at SGS bonds, T-bills, CMTBs, MAS Bills and MAS FRNs auctions.
- Provide market feedback to MAS.
- Assist in the development of the Singapore dollar bond market.
In recognition of their specialist intermediary role, primary dealers enjoy the following privileges:
- Exclusive dealing with the MAS in money market and foreign exchange operations.
- Exclusive access to the MAS Enhanced Repo Facility (ERF) to borrow SGS bonds to facilitate market making.
- Exclusive right to submit applications for SGS auctions and reverse auctions.
- Higher non-competitive tender limit and overall allocation limit at SGS auctions.
- Tax exemption on trading income derived from SGS and MAS-issued securities.
- Close consultation and dialogue with the MAS on SGS auctions and market-related issues.