06 November 2020: IEM Finance Survey: Primary dealers as perceived by investors

IEM Finance conducted the 18th online annual survey of French primary dealers’ (SVTs) clients from 7 September 2020 to 2 October 2020. The aim of this survey is to assess the quality of commercial relationship and services provided by primary dealers to their clients, as well as clients’ views on the functioning of the French government debt market.

In 2020, 197 investors, representing a total of 148 institutions (Asset Management companies, Banks, Insurance companies...), responded to the questionnaire. This corresponds to a response rate of 18.8% in terms of respondents and 43.5% in terms of institutions surveyed.

Main results of the survey:

1- The French government debt market:

-    Investor satisfaction on the functioning of French government debt market remains very high. In France, this proportion reached 100% for the fourth consecutive year. Among all investors, the satisfaction increased as compared to last year: 98.9% declared to be “very satisfied” or “satisfied” in 2020, against 97.1% in 2019.

-    Liquidity and transparency remain highly valued by investors, who consider those criteria to be important for a sovereign issuer, such as AFT. They were 87.8% to assess the liquidity as “very important” and 68.1% of them had the same assessment regarding transparency. Although it was considered to be less important, the assessment of predictability has been improving significantly since 2018 by the majority of investors.

-    Liquidity is considered to be satisfactory (“very satisfactory” or “satisfactory”) by a very large part of investors for OAT, BTF and inflation-indexed securities. Among investors who were able to provide their opinion, they were respectively 98.3%, 94.6% and 70.5% to assess it as satisfactory.

-    Beyond information provided by AFT, a vast majority of investors (96.6%) were still “satisfied” by the information received from French public institutions on economic policy and public finances. This figure was 90.1% in 2019.

-    A vast majority of investors continued to declare to be “very satisfied” or “satisfied” (93.2%) with the reopening of old lines at auctions (“off-the-run”). This proportion was 94.9% in 2019.

-     The proportion of investors who declared to have bought the Green OAT (OAT 1.75% 25 June 2039) continued to increase significantly from 40.2% in 2019 to 45.8% in 2020. About two thirds of them declared to have bought it for its “Green” specific feature. Investors who expressed an opinion declared to be satisfied with the information published on the Green OAT (nearly 93.9%).


2- The Primary dealers - SVTs:

- On fixed-income markets overall,the top-five most frequently quoted primary dealers by investors as being their main partner are:

2020 2019
1 – JP Morgan
2 – BNP Paribas
3 ex aequo – Barclays bank et Nomura
5 – Goldman Sachs


1 – JP Morgan
2 – BNP Paribas
3 ex aequo – Barclays bank et Société générale
5 – Citigroup

- On the French government debt market, the top-five most frequently quoted primary dealers by investors as being their main partner are:

2020 2019
1 – BNP Paribas
2 – JP Morgan
3 – Crédit Agricole - CIB
4 ex aequo - HSBC France et Société Générale
1 – BNP Paribas
2 – Société Générale
3 – JP Morgan
4 – Crédit Agricole - CIB
5 – Barclays bank

-    For the investors surveyed, being a primary dealer is still the most important criterion for the selection of an intermediary, followed by the League Table published by AFT at the beginning of February, which assesses the performance of primary dealers on the primary and secondary markets and in terms of the quality of the service offered. The importance of these two criteria increased once again: the proportion of investors who considered them to be “very important” or “important” (77.7% and 41.5% respectively) reached its highest level since the launch of the survey in 2003.

-    Investors also gave their opinion on attention paid to the quality of various services offered by primary dealers:

o    The quality of pricing remains largely ahead of investor expectations. In 2020, 91.3% of them were assessing it as “very important”. This is the highest level observed since the launch of the survey in 2003 and more than 10 percentage points higher than last year.
o    Information, advice and sales coverage, research and quality of back/middle office, coming in second, third and fourth place respectively, were also assessed as “very important” by more investors in 2020 than in 2019, but to a lesser extent. The three services were considered to be “very important” by 51.6%, 31.7% and 27.7% of investors respectively.
o    Overall, ratings of primary dealers increased for the three assessed services in 2020: pricing, sales and coverage and research.