Five financial institutions are appointed as “Primary Dealers in Government securities”. They are: Islandsbanki, NBI Landsbanki, Arion Bank, MP Bank and Straumur Investment bank.
The following bullet points describe the content of the Agreement:
Primary dealers have exclusive access to auctions of Treasury securities.
Primary dealers have exclusive access to securities lending facility offered by the Central Bank on behalf of the Treasury.
Primary dealers are obliged to submit bids at each auction for a minimum of 100 m.kr. at nominal value.
Primary dealers are Market Makers in the secondary market for Treasury benchmark series. They are obliged to submit bid and ask offers on the NASDAQ ICELAND Exchange for at least 80 to 100 m.kr. at nominal value in each benchmark series.
Primary dealers are in their bid and ask quotes governed by maximum spreads as laid out in the agreements.
Primary dealers are obliged to renew their offers within ten minutes after execution of transaction. If the primary dealer’s total transactions in one series during single day equal 600 m.kr. nominal value, the primary dealer is entitled to depart from the maximum spread requirement for that particular series for the remainder of that day.
The agreement is valid from Apríl 1, to March 31, each year.
A sample agreement is attached that provides comprehensive information on the Primary Dealers rights and obligations.