The Royal Bank of Canada’s (RBC) investment banking division, RBC Capital Markets, has been selected as a primary dealer of Treasury securities by the Federal Reserve Bank of New York.

Informing DealBook about the RBC designation that becomes effective from Wednesday, Jonathan Hunter - the co-head of RBC’s fixed income & currencies group – said that it was in October last year that RBC had initiated discussions with the New York Fed, for becoming a primary dealer.

Canada’s largest bank said that it is the only Canadian partaker in the primary dealer program – though it holds a similar status in Canada and England. With its addition, the number of firms dealing directly with US Federal Reserve has increased from a record low of 16, to reach 17.

As a primary dealer, RBC will take part in the New York Fed’s open-market buying and selling of securities – which happens to be the chief component of the Fed’s setting of target rates for overnight bank loans. In addition, RBC will also provide market information to the Fed, and participate in Treasury auctions.

Hunter said that the selection of RBC Capital Markets as a primary dealer “is not an end or a golden chalice. Although this is a great milestone and a great benchmark, it’s part of an evolving strategy that has been going on for some time.”