A firm that must report its transactions and positions in Treasury securities to the Federal Reserve. A reporting dealer must make these reports because it helps the Federal Reserve make decisions with regard to the money supply. That is, reporting dealers help the Fed decide whether to sell or buy Treasury securities to affect interest rates and, therefore, the money in circulation. See also: Primary dealer.
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Any of various independent dealers in government securities who report their trading activity and security positions to the Federal Reserve. Because the Federal Reserve uses purchases and sales to influence the money supply, information from reporting dealers plays an important part in monetary policy. Compare primary dealer. See also open-market operations.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.