The Federal Reserve Bank of New York today published a revised policy regarding the administration of relationships with primary dealers. This revision includes new geographic dispersion standards and a few minor clarifications in the policy.
On behalf of the Federal Reserve System, the New York Fed’s trading desk engages in transactions with primary dealers to implement monetary policy and conduct Treasury auctions. Open market operations, Treasury auctions, and settlement activities need to be conducted even amid wide-scale disruptions in large metropolitan areas such as the New York region where many market participants are located. The new geographic dispersion standards require primary dealers to employ geographic dispersion between their primary and secondary locations to allow participation in desk operations even amid wide-scale disruptions. Primary dealers will be expected to meet these new standards after a transition period.