Primary Dealers-Harshad Jain

Primary Dealer

Primary Dealers

Objectives

Primary Dealers

1 . B r o a d B a s i n g : s t r e n g t h e n i n g t h e i n f r a s t r u c t u r e

2 . D e v e l o p i n g c a p a b i l i t i e s : d e v e l o p m e n t o f

u n d e r w r i t i n g a n d m a r k e t m a k i n g c a p a b i l i t i e s .

3 . I m p r o v e d t r a d i n g : t o c o n t r i b u t e f o r p r i c e

d i s c o v e r y , e n h a n c e d l i q u i d i t y a n d t u r n o v e r .

4 . O p e n m a r k e t o p e r a t i o n s : e f f i c i e n t c o n d u c t o f

O M O .

Roles and Obligations

Primary Dealers

1 . B i d d i n g : s h a l l a g g r e g a t i v e l y b i d f o r m i n i m u m

a m o u n t s i n C e n t r a l g o v e r n m e n t d a t e d s e c u r i t i e s

a n d T - B i l l a u c t i o n s .

2 . U n d e r w r i t i n g : s h a l l i n v o l v e t h e m s e l v e s i n

u n d e r w r i t i n g a p r e - d e t e r m i n e d p a r t o f t h e s l a c k

i n s u b s c r i p t i o n / a c c e p t e d b i d s a g a i n s t n o t i f i e d

a m o u n t .

3 . O f f e r i n g q u o t e s : s h a l l o f f e r 2 - w a y q u o t e s

4 . M a i n t a i n i n g C a p i t a l A d e q u a c y S t a n d a r d ( C A S ) :

m u s t m a i n t a i n C A S a t t h e l e v e l p r e s c r i b e d b y R B I .

Promoting Primary Dealers

Primary Dealers

1 . I n f r a s t r u c t u r e : c r e a t i o n o f n e c e s s a r y i n s t i t u t i o n a l

i n f r a s t r u c t u r e

2 . F i n a n c i a l s u p p o r t : b y w a y o f ‘ R e p o ’ f a c i l i t i e s

a g a i n s t 9 1 - d a y T - B i l l s a n d g o v e r n m e n t d a t e d

s e c u r i t i e s .

3 . R e s o u r c e s a u g m e n t a t i o n : p e r m i s s i o n t o i s s u e

c o m m e r c i a l p a p e r s a n d t o r a i s e i n t e r - c o r p o r a t e

d e p o s i t s .

R B I ’ s m e a s u r e s t o p r o m o t e P D s

Liquidity Support

Primary Dealers

R B I o f f e r s l i q u i d i t y s u p p o r t t o P D s i n g o v e r n m e n t

s e c u r i t i e s m a r k e t i n t h e f o l l o w i n g m a n n e r

1 . R e p o s : t h r o u g h a u c t i o n o f T - b i l l s a n d c e n t r a l

g o v e r n m e n t d a t e d s e c u r i t i e s a t t h e b a n k r a t e

2 . L i q u i d i t y : b y l i n k i n g l i q u i d i t y s u p p o r t t o P D s

b i d d i n g c o m m i t m e n t s a n d s e c o n d a r y m a r k e t

o p e r a t i o n s

Regulations

Need to meet the requirements of SEBI

Must join PDAI and FIMMDA

Any changes in share holding pattern

needs approval from RBI

RBI holds the right to cancel the Primary

dealership.

Primary Dealers

Supervision

Must submit the periodic returns to RBI.

On site inspection

Primary Dealers

Thank you

Primary Dealers