The Bureau of the Treasury (BTr) will give more perks to the primary government securities eligible dealers (GSEDs) or so-called “market makers” to make sure trading is uninterrupted, National Treasurer Roberto Tan said.

Tan said the circular revising the rules of securities trading and which would update the GSED list will revolve around this amendment.

“BTr wants to ensure that trading continues (that) it is not interrupted,” according to Tan. “This is why we are clearly (segregating) the two groups of GSEDs to distinguish active GSEDs and we can help them (because) they are market makers.”

Primary GSEDs or the market makers will receive BTr support such as in lending cash and lending government securities. “If they need supply (of government securities) then we will provide them. If they tell us they have buyers, then will help them,” said Tan.

At the moment, there are only 10 active GSEDs out of 41.
 
The BTr qualify the GSEDs as primary dealers based on volume of their awards. But some GSEDs participation in the market are mere volumes and not “real.” There are proposals to classify inactive banks in a new category to weed out the ordinary from primary dealers.

The GSED review has been pending for years and the main purpose is to update the procedures and rules of accrediting GSEDs.

GSEDs are BTR-licensed or accredited banks. These banks are also licensed by the Securities and Exchange Commission and as a securities dealer with other functions, it may also be supervised by the Bangko Sentral ng Pilipinas or Insurance Commission.

BTr has conducted several reviews of the GSED rules and requirements for accreditation, which includes all GSED-related circulars which may also include registry, settlement and statement of securities account, trading, among others.

Banks transactions and dealings of government securities and other instruments have changed over the last 10 years. For example, a dealer can no longer transact deals with the public directly, only a broker can do that. If a bank is a dealer then it cannot be a broker at the same time.

Tan said the GSED rules are old and there is a need to review the performance of all of the accredited banks.

Of 41 GSEDs, 35 are banks and six are non-banks. (LCC)