Gary K. Bielfeldt and Carlotta J. Bielfeldt - Page 7

                                        - 7 -                                         

          Fed applies the following criteria:  (1) The firm must have                 
          adequate capital relative to the positions it assumes; (2) the              
          firm must participate consistently and meaningfully in Treasury             
          auctions of new securities and must submit bids in every auction;           
          (3) the firm must file periodic reports with the Fed setting                
          forth certain market information; and (4) the firm must be an               
          effective market maker.                                                     
               Primary dealers trade Treasury securities for their own                
          accounts (proprietary trading) or for the accounts of customers             
          pursuant to customer directives (customer trading).  These two              
          types of trading are not mutually exclusive.  A primary dealer              
          may accept a customer's bid or offer for a particular security as           
          part of the dealer's proprietary trading strategy, or it may                
          initiate trades to improve its proprietary position.  Primary               
          dealers frequently trade Treasury securities with other primary             
          dealers either directly (trader to trader) or indirectly through            
          interdealer brokers.  Primary dealers frequently sell to other              
          primary dealers the Treasury securities that they purchase at               
          auction.  When a primary dealer and a counterparty agree on a               
          transaction, a trade ticket is prepared which states the terms of           
          the transaction.  The primary dealer uses the information on the            
          trade ticket to prepare a confirmation slip that is sent to the             
          counterparty.                                                               


               4(...continued)                                                        
          The Treasury securities market has many secondary dealers.                  


Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011