The Reserve Bank of India has widened direct access to its Negotiated Dealing System-Order Matching (NDS-OM) electronic trading platform to a broader set of regulated entities (REs) including regional rural banks, local area banks, non-banking finance companies (including housing finance companies), among others.
Provident funds, pension funds, and regulated Market Infrastructure Institutions (MIIs) too will have direct access to the platform.
Direct access means access to NDS-OM wherein an entity that is party to a transaction directly executes/reports the transaction on/to the platform and such transactions are settled in its own Subsidiary General Ledger (SGL) account.
The aforementioned move comes in the backdrop of increased trading in Government Securities (G-Secs) after their inclusion in JPMorgan Chase’s benchmark Emerging Markets Bond Index Global Diversified (GBI-EM GD) index.
G-Secs will also be included in the Bloomberg EM Local Currency Government indices, starting January 2025. Further, FTSE Russell will include G-Secs to its Emerging Markets Government Bond Index (EMGBI), with inclusion starting in September 2025.
Entities that are eligible to seek direct access to NDS-OM need to have an SGL (securities general ledger) account and a current account with the Reserve Bank or a Designated Settlement Bank; and membership of securities settlement segment of Clearing Corporation of India Limited
Foreign Institutional Investors (FIIs), and Corporates will continue to have indirect access to NDS-OM.
Indirect access means access to NDS-OM wherein an entity undertakes its transactions through another entity that has a direct access to NDS-OM and which assumes responsibility for settlement of such transactions.