Societe Generale quits as UK primary dealer - DMO

LONDON, Jan 29 (Reuters) - Societe Generale (Swiss: 519928.SW - news) will next week become the second bank to stop acting as a primary dealer for British government bonds in just over three months, the UK Debt Management Office said on Friday.

SocGen (Paris: FR0000130809 - news) follows in the lead of Credit Suisse (LSE: 0QP5.L - news) , which resigned as a gilt-edged market maker (GEMM) in late October to reduce costs, and will reduce the number of wholesale GEMMs to 16. GEMMs have the exclusive right to bid at British government bond auctions and run debt syndications.

Earlier this week, the DMO had said dealers were finding the gilt market "particularly challenging" and were reviewing their business plans due to the high capital costs of maintaining stocks of British government debt to trade.

SocGen will cease acting as a GEMM for both the index-linked and conventional bond markets at close of business on Feb. 5. (Reporting by David Milliken, editing by Andy Bruce)