The Government passed a decree amending the Provision on the Institute of Primary Dealers. The previous version of the Regulation on the Institution of Primary Dealers provided that solely banks could be participants in the placements of domestic government bonds. However, the securities traders which create a significant demand and have the possibility to purchase the bonds at the auctions held by the Ministry of Finance only through the banks - primary dealers, were losing their competitive advantage because of the restrictions on the type of financial institutions which were allowed to participate in primary auctions.
Thus, the implementation of this decision allows amending the Regulation on the Institution of Primary Dealers, determining primary dealers as financial institutions that meet the established requirements. Moreover, the clarifications are made on the certain requirements for primary dealers, namely: on the period of bond trading (during the last year), on the timing of evaluation of the performance of primary dealers' obligations (by the results of a calendar year), as well as on the performance of their obligation to maintain liquidity of government bonds in the secondary market.
Expanding the circle of primary dealers will promote competition in the primary market of government bonds, increase liquidity, and facilitate the reduction of the cost of borrowing in the local market for the government. The development of the domestic government securities market allows the Ministry of Finance to achieve one of the objectives set out in the Medium-Term Public Debt Management Strategy, namely, to increase the share of state debt in the national currency.