A. The bank-PDs' role and obligations in terms of supporting the primary market auctions for issue of Government dated securities, underwriting of Dated Government Securities, market-making in Government securities and secondary market turnover of Government Securities must not contravene any of the prudential rules currently in place for banks.

B. Bank-PDs are required to form a Primary Dealers' Committee and abide by a code of conduct that should be framed by such a committee and such other actions initiated by them in the interests of the securities markets.

C. The investment policy of the bank should be suitably amended to also include PD activities. Within the overall framework of the investment policy, the PD business undertaken by the bank will be limited to dealing, underwriting and market-making in Saudi Government Securities. Investments in Corporate bonds, Commercial Papers, Certificate of deposits and other fixed income securities will not be deemed to be part of the PD business.

D. Bank-PDs should update their investment policy and/or framework and implement a Board approved investment policy and operational guidelines on securities transactions. The policy/framework should include (but not limited to) the following:

- The broad objectives to be followed while undertaking transactions in securities on their own account and on behalf of clients;

- Clearly define the authority to put through deals, and lay down procedure to be followed while putting through deals;

- Various prudential exposure limits;

- Policy regarding dealings through brokers;

- Systems for management of various risks;

- Guidelines for valuation of the portfolio and the reporting systems;

- Operational procedures and controls in relation to the day-to-day business operations to ensure that operations in securities are conducted in accordance with sound and acceptable business practices.

- The effectiveness of the policy and operational guidelines should be periodically evaluated 

E. The classification, valuation and operation of investment portfolio guidelines as applicable to banks in regard to "Held for Trading" portfolio will also apply to the portfolio of Government Dated Securities earmarked for PD market-making business.

F. The Government Dated Securities under Bank-PD business will count for SAMA Liquidity Ratios.

G. Bank-PDs should report to SAMA any violations of the terms and conditions of undertaking agreement they sign with the Debt Management Office (DMO).