In a “riskless principal” transaction, when the dealer buys the MTN, it has already lined up an investor that has agreed to the terms of the resale. (Federal Reserve-Bulletin) “Riskless principle” transactions typically are undertaken as an alternative method of executing orders by customers to buy or sell securities on an agency basis. The mark-up or mark-down charged by the broker-dealer must be disclosed only if the securities are equity securities. The broker-dealer does not have to disclose to counterparties that it is acting as a “riskless principal” To other dealers with which it executes trades, it would be another dealer acting as a principle in buying and selling for its own account. A broker-dealer might have an incentive to act as a “riskless principal ” (as opposed to an agent) in executing customer orders when: a customer wishes to avoid disclosure of its identity to market participants so that the customer’s strategy with respect to purchases or sales of certain securities is not ascertainable by others in the market; the broker-dealer knows that the prospective seller (or purchaser) will not wish to deal directly with the customer; or the customer (or the broker-dealer) wishes a single “all-in” price quotation for the transaction rather than being charged a separate purchase price plus brokerage commission. (Federal Reserve-Bulletin)