Primary dealers

The Republic of Finland currently has fourteen primary dealers. Primary dealer banks have an important role in the implementation of government borrowing and ensuring secondary market liquidity. The State Treasury usually selects primary dealers to act as the lead banks for arranging syndicated issues. They are also entitled to take part in the auctions organised by the State Treasury.

Primary dealers provide bid and ask prices on the secondary market for government benchmark bonds, which are the most important government bonds.

Co-operation with primary dealers is based on the primary dealer agreement: Primary Dealer Agreement 2019 (pdf)

The primary dealers:

  • Securities lending facility

    A securities lending facility for the Republic of Finland benchmark bonds (RFGBs) is available for eligible (GMRA) counterparties.

    The State Treasury lends serial bonds with benchmark status overnight via repurchase agreements. Lending is available against cash only. Please see detailed criteria for the repo facility in the table below.

    Available to GMRA (Global Master Repurchase Agreement) counterparties in Finnish Government Bonds
    Securities RFGB benchmark bonds, facility not available on coupon payment dates and year-end. STF to decide when facility is available, see ThomsonReuters SUVE and Bloomberg STF screens
    Amounts available Min EUR 5 000 000
    Max EUR 200 000 000 per counterparty
    Value date Same day value
    Timing No later than 1:00 PM CET
    Term O/N only, transactions are concluded for 1 trading day with rolling maximum 4 consecutive trading days
    Trading days TARGET, Helsinki
    Pricing Most recent Eonia quote minus a spread. Additional negative spread from 3rd rolling day.Current prices on ThomsonReuters SUVE and Bloomberg STF screens.
    Spread 0.5%, additional spread 0.25% from 3 rd rolling day.
    Pricing source Market value is calculated on Bloomberg on basis of most recent ask price (lowest yield) for RFGB.
    Margin Margin ratio: none

  • Secondary market

    Interdealer market

    Trade in government benchmark bonds between market makers is primarily conducted in the electronic MTS Finland marketplace but trading takes place also in Brokertec and eSpeed market places.

    Primary dealers can choose one or more platforms to fulfill their market making obligation. The State Treasury monitors trading activity in all designated market platforms. In the last few years, the trading volume has been EUR 3-5 billion per month.

    Multi-platform trading aims to promote trading activity and to decrease bid-ask spreads of the benchmark bonds.

    More information on MTS Finland

    Customer trades

    Primary dealers submit monthly reports to the State Treasury on their trading with end investors. In recent years, the trading volume has averaged between EUR 7 to 9 billion per month. The largest system concentrating on investor trading is Bloomberg.

, Updated 8.7.2019 at 09:25