Nasdaq Riga Primary Dealers

Latvian government debt security auctions are taking place on the Nasdaq trading platform.

Participation in government debt securities auctions

Only those financial institutions which have signed a primary dealer agreement with the State Treasury are admitted to participate in government debt securities auctions. In the dialogue with investors, the primary dealers have the role of intermediary and market expert. They purchase securities on investors’ behalf in primary placement auctions. Primary dealer functions also include secondary market making and organization.

List of current primary dealers

Citadele Banka (CTD)
Luminor Bank (DNBV)
SEB Bankas (VLB)
Swedbank (SWBR)
Erste Group Bank (ERST)

Obligations of primary dealers

To act as an intermediary between the issuer and the investor by distributing securities they have bought and thus facilitating expansion of the investor base;
To provide liquidity to the secondary market by promoting trading and efficient pricing of securities.

How to apply for a primary dealer status

A Member of Nasdaq Riga may submit an application to the Treasury of becoming a primary dealer after which the Treasury assess the following criteria:

Compliance – whether the candidate is a credit institution and a Member of Nasdaq Riga, and whether the Member complies with all the requirements stipulated in the relevant legal acts;
Quality – assessed with regard to activity in the secondary domestic government debt market, and other aspects.

More information available on the State Treasury website:

https://www.kase.gov.lv/en/debt-management/government-domestic-securities/primary-dealers

Auctions in detail

Competitive multi-price auction – Bidders may enter one or several bids, specifying the yield in each order. The organizer of the auction (the State Treasury) then sets the maximum yield until which the submitted orders will be executed.
Non-competitive or fixed-rate auctions – The organizer of the auction sets the yield and the issue of debt securities is distributed in proportion to the bids entered by auction participants.
Tap issues – the organizer of the auction approves bids by auction participants based on the order in which they were entered.