Common in currency markets, fixed income and increasingly in equities, an SDP is a private shop window. The dealer streams its own quotes, decides who sees what, and can adjust pricing per client.
That customisation cuts both ways: good clients get tight spreads, and clients whose flow is consistently right get wider prices, slower fills or last-look rejections.
Example: a fund receives a EUR/USD quote of 1.08501/1.08503 on an SDP, tighter than the 1.08500/1.08505 available on a multi-dealer platform. The tighter price exists because the dealer has profiled the fund's flow as benign. Change the trading style and the spread quietly widens.
Related: request-for-quote, internalisation