Primary dealers in treasury auctions When the treasury or equivalent institution of a country auctions of government bonds there is frequently (i.e. in most countries) some sort of restriction on who can participate. The term primary dealers refers to agents who participate in this primary auction with the intent of reselling the acquired bonds on the secondary market. Usually there is a gap between the bond price (or implied interest rate) of the primary and the secondary market so this is profitable.

Some papers on the phenomenon:


VALUING DEALERS' INFORMATIONAL ADVANTAGE: A STUDY OF CANADIAN TREASURY AUCTIONS (JStor access needed)
Who Buys Treasury Securities at Auction


What benefit if any does the treasury derive from this setup, i.e. restricting auction access?
(As requested in comments)
Primary dealers have a privileged position, so there is value in being registered as a primary dealer.
The Treasury or Central Bank can impose standards of behaviour (e.g. an expectation of reasonable participation in all bond auctions or open market operations) as a condition of maintaining that registration. There are rules such as https://www.newyorkfed.org/markets/pridealers_policies.html and you will find sections such as

The New York Fed expects a primary dealer to:

participate consistently as counterparty to the New York Fed in its execution of open market operations to carry out U.S. monetary policy pursuant to the direction of the FOMC;

provide the New York Fed’s trading desk with market commentary and market information and analysis helpful in the formulation and implementation of monetary policy;

participate in all auctions of U.S. government debt; and

make reasonable markets for the New York Fed when it transacts on behalf of its foreign official account holders.


In the selection process, the New York Fed will evaluate a prospective primary dealer with these expectations in mind.

In effect primary dealers provide liquidity and information and markets even at times of crisis, which comes at a cost, one which countries such as the USA think is worth paying to get the increased financial stability it brings.