The Reserve Bank of India (RBI) has expanded direct access to its Negotiated Dealing System-Order Matching (NDS-OM) electronic trading platform to a wider range of Regulated Entities (REs) such as Regional Rural Banks (RRBs), Local Area Banks (LABs), Non-Banking Finance Companies (NBFCs), including Housing Finance Companies(HFCs), among others.
- The new guidelines have enabled the entities to either gain direct access, permitting them to execute transactions on the NDS-OM platform, or opt for indirect access in partnership with an entity that holds direct access.
- RBI has issued these directions in exercise of the powers given under section 45W of the RBI Act, 1934 read with section 45U of the RBI Act, 1934.
- The revised directions now called the RBI (Access Criteria for NDS-OM) Directions, 2024 and these directions came into effect from 18th October, 2024.
About NDS-OM:
i.It is a screen based electronic anonymous order matching system for secondary market trading in Government Securities (G-secs)owned by the RBI. It was launched in 2005.
ii.The aim of NDS- OM to reduce inefficiencies stemming from telephone orders and manual paperwork while increasing transparency for all market participants.
iii.The Government of India(GoI) issues bonds, treasury bills, and State Development Loans from the NDS platform.
Key Changes:
i.As per the new directions, any entity or person who is eligible to invest in G-secs in accordance with the rules or guidelines issued by the GoI or state governments or the RBI, as amended from time to time will be eligible to have direct or indirect access to NDS-OM.
ii.Entities that are eligible to seek direct access to NDS-OM are required to fulfill certain conditions such as: Security General Ledger (SGL) account and a current account with the RBI or a designated settlement bank; and membership of securities settlement segment of Clearing Corporation of India Limited (CCIL).
iii.RBI has specified that direct access to NDS-OM granted to an entity is not transferable and RBI has power to add new conditions if the entity is found to violate the provisions of these directions or any other rules or regulations or conditions of access.
iv.Foreign Institutional Investors (FIIs) and Corporate Companies will continue to have indirect access to NDS-OM.
- Provident Funds(PF), pension funds, and regulated Market Infrastructure Institutions (MIIs) too will have direct access to the platform.
Recent Related News:
The Ministry of Corporate Affairs (MCA), Government of India (GoI) in consultation with the Reserve Bank of India (RBI) notified the National Bank for Financing Infrastructure and Development (NaBFID) as a Public Financial Institution (PFI) under the Section 2 of the Companies Act, 2013.
About Reserve Bank of India(RBI):
Governor- Shaktikanta Das (25th Governor of RBI)
Headquarter- Mumbai, Maharashtra
Established-1 April, 1935
