Primary dealers
A primary dealer system is a form of partnership between the issuer and financial institutions, the purpose of which is the implementation of a single strategy for strengthening and developing the functionality of the primary placement and secondary trading of securities.
Primary dealer system in Latvia has been launched on 11 February, 2013.
The objective of introducing this system is to stimulate activity and development of the government debt securities market – new borrowing instruments, broadening of investor base, more active, liquid and attractive securities market for investors, as well as to reduce risks associated with servicing government debt.
Two-way quotes in the secondary market shall be provided for the following government securities and at any time subject to the primary dealer having the relevant paper on the trading book:
- for series of bonds with the nominal amount outstanding of at least EUR 50 (fifty) million and more than 3 (three) calendar months remaining until.
- for series of bills with the nominal amount outstanding of at least EUR 20 (twenty) million and more than 3 (three) calendar months remaining until maturity;
Actual benchmark domestic securities:
| ISIN CODE | Date of Maturity | Type of Security | Amount outstanding at nominal values, EUR |
|---|---|---|---|
| LV 00005 70174 | 31.Jan.2025 | 5 year T-bonds | 390 001 000,00 |
| LV 00005 70182 | 03.Jul.2027 | 7 year T-bonds | 80 000 000,00 |
Actual benchmark domestic GMTN Notes:
Information regarding the GMTN Notes TAPs (reopenings) issued in domestic market is available here.
Two-way quotes provided by primary dealers are available in:
- Bloomberg (LATVGB un LATVTB)
- NASDAQ Riga electronic trading system Genium INET.
Main obligations of primary dealers:
- to act as intermediaries between the issuer and the investor by way of distributing the securities purchased and facilitating the broadening of the investor base;
- to ensure the liquidity of the government debt securities market by promoting secondary trading and the effective pricing of securities;
- to provide reports to the Treasury regarding transactions with Latvia government securities.
Main rights of primary dealers:
- to participate in the primary placement of government domestic debt securities and other government domestic borrowing transactions;
- to receive the status of a primary dealer of government securities.
The Treasury concludes an Agreement with each primary dealer on Agreement on Participation in Organising the Government Domestic Debt Securities and DOmestic Global Medium Term Notes Primary and Secondary Market.
The Agreement with primary dealers is standardised and the form is available here:
Reports on government securities:
Auction participants – Primary dealers - shall provide the Treasury with the information on primary and secondary market trades executed during the previous month in the Harmonised Reporting Format as agreed by the EFC Sub-Committee on EU Sovereign Debt Markets. Later on this informations is consolidated into the Euro Market Activity Report (EMAR).
The trades to be reported include Latvia government securities in both domestic and international markets and denominated in euros.
Primary dealers submit reports on transaction in XML format to the Treasury (pasts@kase.gov.lv).
Additional information:
Guidelines on HRF (Format 13.04.2022)
More information on the Harmonised Reporting Format can be found on the EFC Sub-Committee on EU Government Bonds and Bills Markets' website.
Consolidated euro area primary dealer activity reports EMAR can be found here.
The size of the primary dealer group in Latvia has been assessed based on the number of market participants at government debt securities auctions, as well as their activity in terms of bidding and security purchases, and from the point of view of attracting potential investors from Latvian and international financial and capital markets.
The primary dealers group is as follows:
- Citadele banka
- Erste Group Bank AG
- Luminor Bank AS
- SEB bankas
- Swedbank
Any other market participants are also be able to claim the status of a primary dealer by qualifying certain criteria and submitting an application to the Treasury and providing additional information by the request of the Treasury.
The Treasury evaluates the candidates of the primary dealer using various criteria. The detailed qualification criteria for a primary dealer candidate can be find here.