* NY Fed adds Bank of Nova Scotia, BMO Capital as dealers
* First additions to primary dealer list since February
(Adds details about SocGen, MF Global, primary dealer
By Emily Flitter
NEW YORK, Oct 4 The Federal Reserve Bank of New
York on Tuesday granted primary dealer status to two large bond
dealers, Bank of Nova Scotia (BNS.TO) and BMO Capital Markets
(BMO.TO), bringing the total number of primary dealers to 22.
The announcement comes as some of the financial firms on
the primary dealer list, including French banks Societe
Generale (SOGN.PA) and BNP Paribas (BNPP.PA), are being rocked
by the euro zone debt crisis.
Tuesday's additions are the first since February, when the
New York Fed added SocGen and MF Global Holdings Ltd MF.N to
Primary dealers are the financial firms with special
permission to bid directly on behalf of their clients at
Treasury auctions and help the Federal Reserve carry out
They are required to place bids at every Treasury auction,
and they take on to their own balance sheets the Treasury debt
they do not immediately sell to customers.
The coveted designation is seen as a status booster and a
stamp of approval by the Fed. But it is often not a lucrative
business on its own.
Qualifying to be a primary dealer grew more difficult
recently after the New York Fed set new capital levels as well
as other more stringent requirements for applicants in January
The two new additions to the primary dealer list are both
Canadian bank subsidiaries. A third Canadian institution, TD
Securities (TD.N), has been waiting for approval to become a
primary dealer since at least July 2009.
(Additional reporting by Chris Reese; Editing by Padraic