The State Bank of Pakistan appointed 13 banks as Primary Dealers (PDs) of government securities and two companies as Special Purpose Primary Dealers (SPDs) for Financial Year 2021-22. According to a circular issued by the Domestic Market and Monetary Management Department of SBP, after evaluation of received applications under the laid down criteria the central bank has selected 13 applicants for appointment as primary dealer while 2 other institutions were selected for the role of SPDs of government securities-PIB and MTB. Primary Dealers appointed for FY 2021-22 included Habib Bank Limited, Allied Bank Limited, Bank Al-Falah Limited, JS Bank Limited, National Bank of Pakistan, MCB Bank Limited, United Bank Limited, Pak Oman Investment Company Limited, Faysal Bank limited, Standard Chartered Bank (Pakistan) Limited, The Bank of Punjab, CitiBank N.A-Pakistan Operations and Industrial and Commercial Bank Of China-Pakistan. National Clearing Company of Pakistan Limited and Central Depository Company of Pakistan were appointed as Special Purpose Primary Dealers. The performances of PDs, PPDs and SPDs were evaluated by the central bank in accordance with their respective Performance Evaluation Criteria and the SBP announced top performing PDs and PPDs via a Circular on an annual basis. Top three performing PDs during FY 2020-21 were Habib Bank Limited, Allied Bank of Pakistan and Bank Al-Falah Limited, the circular stated. All the dealers are supposed to actively participate in the primary market by bidding in the auctions of Government securities as conducted by SBP from time to time with a view to improve participation in primary auctions, enhance distribution, diversify investor-base and develop market for government securities. They also distribute government securities to non-PD banks and other retail or institutional clients. Additionally, PDs and PPDs shall also act as market makers in Government securities by quoting two-way prices in the secondary market. The PDs, PPDs and SPDs were required to continuously upgrade their infrastructure in terms of both physical equipment and skilled manpower so that they could play an active role in Government securities market development for enhancing liquidity and turnover and widen the investor base of Government securities by creating awareness among investors and taking other meaningful initiatives. Besides, they were also required to provide efficient custody services to its customers (Investor’s Portfolio of Securities Accounts) for Government securities holding, collection and payment of profits and maturity proceeds. To incentivize performance of their roles and obligations dealers were offered privileges like direct access to primary auctions and buyback auctions, right to submit pass-through bids and Non-Competitive Bids (NCBs), claim commission on underwriting and mobilizing NCBs in the primary auctions and option to purchase additional securities for their own account through Non-Competitive Subscriptions (NCS). The dealers have to comply with certain obligations as well which included mandatory participation in each auction, minimum underwriting commitment, quoting two-way prices as per the defined maximum bid-ask spreads and lot-sizes, among others.