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Primary Markets

Primary markets are the markets where government securities are first issued and sold, often by means of some form of tender or auction process. A well-functioning primary market is crucial to develop reliable distribution channels. Responsibility for establishing a primary market rests with the national government and the choice of primary market procedures is a dynamic process that depends on each country's initial conditions and on subsequent developments.

Debt instruments should be selected on the basis of their issuing method, coupon and principal repayment, maturity term, and currency of denomination in order to establish a well-functioning and sustainable access to investors. Operations should be transparent and predictable. Procedures for the issuance of government securities, including the auction format and rules for participation, bidding, and allocation should be clear to all participants. Rules concerning primary dealers and other intermediaries in government securities, including the criteria for their selection and their rights and obligations, should also be publicly disclosed. To the extent possible, debt issuance should use market-based mechanisms, including competitive auctions and syndications.