Loading the context…
Loading the context…
A securities dealer designated to participate in specified government-debt and central-bank market operations.
Save conceptA primary dealer is a securities dealer given a designated role in specified public debt or central-bank operations. The word primary refers to the market in which an instrument is first issued. The dealer can also support later trading. Designation describes the institution’s role in a particular system; it is not a general promise that every product it offers has the same rules or protection.
Bank of Jamaica and Jamaica’s Ministry of Finance coordinate the local primary-dealer system. BOJ describes participating dealers as licensed by the Financial Services Commission and designated by BOJ following ministry approval. These institutions are channels for government debt issues and BOJ market operations. Each issue’s terms still determine who can bid directly, whether customers can participate through a dealer, and how applications are priced and allotted.
Imagine an auction allows designated dealers to participate directly and allows other investors to submit applications through them. A customer asks a dealer to arrange an eligible application under the issue’s terms. The dealer provides the market channel; the issuer determines which bids succeed. Merely using the dealer does not guarantee that the customer receives an allotment. The example is hypothetical and does not describe a completed BOJ auction.
A primary dealer is an intermediary with a defined market role, not the issuer of every security it handles. Its designation does not fix an auction’s final price, remove the issuer’s or guarantee a later resale. It also differs from being a commercial bank: an issue may permit both groups to bid directly while giving other investors a route through a dealer.
BOJ schedules J$37 billion certificate-of-deposit auction for October 14