Context:
The Reserve Bank of India has decided that registered non banking brokers with SEBI would be permitted access to the NDS-OM platform in order to enable them to trade and access government securities. The move is a step to enhance retail participation in government securities and thereby improve liquidity in the secondary market.
Key Highlights:
What is the NDS OM Platform?
- An electronic, anonymous order matching system run by the RBI for secondary market trading in G Secs.
- Till recently, open only to banks, primary dealers, insurance companies, and mutual funds.
- Now open also to non bank brokers enabling wider retail participation.
RBI New Guidelines
- SEBI registered stock brokers can now apply to access the NDS-OM platform.
- Brokers would have to tie up with the members of the Clearing Corporation of India (CCIL) for settlement of transactions.
- The October 2024 proposal from SEBI is in line, where it had mooted allowing the brokers to trade G-Secs through a separate business unit.
…. 3. Expected Impact on Retail Participation
- Access at a wider level
- The brokers can reach out to a major retail clientele base, consequently, participation would rise.
- Liquidity facilitation among sellers
- With NDS-OM, more G-Secs would become sellable, meaning more would get liquidated, hence higher liquidity.
- It also would enhance if the broker’s trading platform could get connected with NDS-OM.
Credit: The Hindu
