S. Korea to Introduce Preliminary Primary Dealers for Bonds
The South Korean government plans to introduce preliminary primary dealers to boost competition in the bond market, the Ministry of Strategy and Finance said.
Preliminary primary dealers who perform strongly will be able to become primary dealers while primary dealers who perform badly will lose the status, the ministry said in an e-mailed statement today.
Under a system introduced in South Korea in 1999, primary dealers receive preferential treatment in underwriting government bonds, while also being required to help support the secondary market.
Preliminary primary dealers will have no minimum underwriting requirement while also having fewer privileges, according to the statement.
There are currently 20 primary dealers in South Korea. The system for preliminary primary dealers will begin in March, the ministry said.
To contact the reporters on this story: William Sim in Seoul at wsim2@bloomberg.net
To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net
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