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Role of Primary Dealers in the Government Securities Market
What is a Primary Dealer (PD) in the context of Indian government securities markets?
A Primary Dealer is a financial intermediary authorized by the Reserve Bank of India to directly participate in government securities auctions and act as a market-maker for government securities in the secondary market.
Is the Minimum Underwriting Commitment (MUC) share uniform for all Primary Dealers regardless of their size?
Yes, MUC is uniform for all PDs irrespective of capital or balance sheet size.
Which regulatory authority in India licenses and oversees Primary Dealers?
The Reserve Bank of India (RBI) licenses and regulates Primary Dealers as part of its mandate to develop the government securities market.
What percentage of each government securities issue's notified amount must be mandatorily underwritten through MUC?
At least 50 per cent of each issue's notified amount must be mandatorily underwritten.
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