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.