Primary Dealer Credit Facility - PDCF

DEFINITION of 'Primary Dealer Credit Facility - PDCF'

An institution created by the Federal Reserve to provide overnight loans to primary dealers through their clearing banks in exchange for eligible collateral. The Primary Dealer Credit Facility (PDCF) provides loans that settle the same business day and mature the following business day. As of February 3, 2009, the PDCF will remain in operation until October 30, 2009.

BREAKING DOWN 'Primary Dealer Credit Facility - PDCF'

The Primary Dealer Credit Facility was established in order to encourage financial markets to function more effectively. Primary dealers borrow overnight loans from the PDCF through their clearing banks at the primary credit rate offered by the Federal Reserve Bank of New York.

A frequency-based fee is assigned to primary dealers who borrow from the PDCF on more than 45 business days.

RELATED TERMS
  1. Dealer Incentive

    A corporate sales strategy in which the price a dealer has to ...
  2. Purchase and Resale Agreements ...

    An arrangement between the Bank of Canada and dealers whereby ...
  3. Primary Dealer

    A pre-approved bank, broker/dealer or other financial institution ...
  4. Term Securities Lending Facility ...

    A lending facility through the Federal Reserve that allows primary ...
  5. Markup

    The difference between an investment's lowest current offering ...
  6. Privilege Dealer

    An individual or a securities firm that is registered as a market ...
Related Articles
  1. Investing Basics

    What's a Dealer Market?

    In a dealer market, market participants buy and sell through dealers who are designated as market makers.
  2. Professionals

    MUNICIPAL BOND TRADING

    Municipal Bond Trading Municipal bonds trade over the counter in the secondary market much like OTC stocks. Municipal bond dealers provide quotes on the bonds that they deal in, to other broker ...
  3. Professionals

    Gift Rule

    Broker dealers may not pay compensation to employees of other broker dealers. If a broker dealer wants to give a gift to an employee of another broker dealer, it must: Be valued at less than ...
  4. Professionals

    D. Accrued Interest

    Accrued Interest Most bonds pay interest semi-annually, based on their maturity date. An investor who wishes to sell a bond between the interest payment dates will be owed the interest that has ...
  5. Professionals

    C. Rule 200 Definitions and Order Marking

    Rule 200 updates the definition of who is determined to be long a security. As new derivatives and trading systems and strategies have been introduced, amendments to the short sale rules under ...
  6. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  7. Professionals

    Registration and Regulation of Brokers and Dealers

    FINRA/NASAA Series 26 Section 7 - Registration and Regulation of Brokers and Dealers. In this section manipulative, deceptive or fraudulent devices, discretionary accounts, fraudulent acts and ...
  8. Economics

    How Does a Credit Facility Work?

    A credit facility is a loan or collection of loans a business or corporation takes to generate capital over an extended period of time.
  9. Professionals

    Introduction

    Securities that are not listed on any of the traditional exchanges trade over the counter or on the NASDAQ. NASDAQ stands for National Association of Securities Dealers Automated Quotation System. ...
  10. Professionals

    Transactions

    Riskless Principal Transactions If a brokerage firm receives a customer order to buy or sell a security and the firm does not have an inventory position in the security, the firm may still elect ...
RELATED FAQS
  1. What is the primary use of reverse repurchase agreements?

    Discover how the Federal Reserve utilizes reverse purchase agreements for the primary purpose of offsetting temporary shifts ... Read Answer >>
  2. What are the typical requirements to qualify for closed end credit?

    Learn what closed-end credit is, and the various requirements that borrowers must meet in order to obtain a closed-end credit ... Read Answer >>
  3. Who trades in primary and secondary capital markets?

    Understand how primary and secondary markets function in the trade of financial securities between investors, and learn how ... Read Answer >>
  4. What is the average range for the price-to-earnings ratio in the electronics sector?

    Understand the difference between the primary market and the secondary market, and learn which investors are able to participate ... Read Answer >>
  5. What securities does the primary market deal with?

    Find out what kinds of securities are traded on the primary market, including who can participate in trading and the basics ... Read Answer >>
  6. What are the differences between installment sales and credit sales?

    Determine the differences between credit sales and installment sales, which businesses often offer their customers for deferred ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center