Skip to main content

Draft Directions for Electronic Trading Platforms (ETPs)

Reserve Bank of India (RBI) has issued draft directions for Electronic Trading Platforms (ETPs).

What is Electronic Trading Platform (ETP)?

Electronic Trading Platform (ETP) shall mean any electronic system, other than a recognised stock exchange, on which transactions in eligible instruments are contracted.

What are Eligible Instruments?

Eligible Instruments shall mean securities, money market instruments, foreign exchange instruments, derivatives, or other instruments of like nature, as may be specified by RBI under section 45W of Chapter III-D of RBI Act, 1934.

To whom shall the directions be applicable?

  • The directions are issued to the entities operating ETPs on which transactions in eligible instruments are contracted.
  • The directions shall not apply to electronic systems operated by scheduled commercial banks and standalone primary dealers for transactions in eligible instruments wherein the bank or the primary dealer operating the electronic system is the sole quote / price provider and invariably a party to all transactions contracted on the system, subject to the conditions specified by RBI.
  • The direction shall apply to offshore ETPs only to the extent specified.

What are the conditions for operating an ETP?

  • No entity, resident or non-resident, shall operate an ETP without obtaining prior authorisation of, or having registered with, RBI.
  • In respect of eligible instruments, ETP operators authorised by / registered with RBI shall ensure that transactions only in instruments approved by RBI are contracted on their platform.
  • Existing ETPs requiring authorisation / registration under the directions shall make an application for authorisation / registration within 3 months from the date the directions. An operator of an existing ETP may continue to carry on the operations till disposal of its application by RBI granting or rejecting authorisation / registration.

What is the eligibility criteria for authorisation as ETPs?

An entity seeking authorisation as an ETP operator to commence or carry on ETP operation shall fulfil the following criteria –

  • The entity shall be a company incorporated in India.
  • The entity or its key managerial personnel shall have experience of at least 3 years in operating trading infrastructure in financial markets.
  • An entity shall maintain a minimum net-worth of ₹5 crore at all times.
  • The entity shall obtain and maintain robust technology infrastructure.
  • The entity shall ensure capability to disseminate trade information on a real-time basis or near real-time basis.

What are the directions on in-principle approval?

  • Entities desirous of obtaining authorisation to operate an ETP may apply for ‘in-principle’ approval from RBI for setting up the same before applying for authorisation.
  • The ‘in-principle’ approval shall be valid for 6 months from the date of issue.
  • Entities that obtain ‘in-principle’ approval shall fulfil the prescribed eligibility criteria within 6 months from the date of issue of the ‘in-principle’ approval and submit an application for grant of authorisation.

What are other directions?

  • The ETP operator shall undertake due diligence at the time of on-boarding of all members and identify its members uniquely using Legal Entity Identifier (LEI) and / or Permanent Account Number (PAN).
  • All data relating to activities on the ETP shall be maintained in easily retrievable media for at least 10 years. Without prejudice to the minimum requirement for storage of data, the data sought for any investigation by RBI or any other authority as required under Indian laws or regulations shall be maintained for 3 years from the date of completion of the investigation.
  • Algorithmic trading (Algo trading) shall mean any trade originated by a software programme using automated execution logic.

What are the directions for offshore ETPs?

  • Offshore ETP shall mean an ETP operated from outside India by an operator incorporated outside India.
  • Operators of offshore ETPs desirous of providing residents with access to their platform for transactions with non-residents in eligible derivative instruments involving rupee or rupee interest rate as permitted by RBI under the Foreign Exchange Management Act, 1999 (FEMA, 1999) shall apply for registration with RBI.
  • Operators of offshore ETPs that seek to register with RBI shall fulfil the following criteria –
    • The operator is incorporated in a country which is a member of the Financial Action Task Force (FATF).
    • The operator or the transactions on the offshore ETP are regulated by the financial market regulator of the country where the operator is incorporated or where the transactions are contracted.
    • The financial market regulator that regulates the operator or the transactions on the offshore ETP is a member of the Committee on Payments and Market Infrastructures or the International Organization of Securities Commissions.
    • The offshore ETP permits transactions only in eligible derivative instruments involving rupee and / or rupee interest rates between residents and non-residents that RBI has permitted under FEMA, 1999.
    • The offshore ETP does not allow transactions between residents.


References

Reserve Bank of India. (2024, April 29). 'Master Direction – Reserve Bank of India (Electronic Trading Platforms) Directions, 2024 - Draft'. Retrieved from https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=4425

Reserve Bank of India. (2024, April 29). 'RBI releases Draft Master Direction – Reserve Bank of India (Electronic Trading Platforms) Directions, 2024'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=57809


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Trade Receivables Discounting System (TReDS)

Reserve Bank of India (RBI) has issued the directions on Trade Receivables Discounting System (TReDS). What is TReDS? TReDS is a technology platform on a digital or electronic network for facilitating factoring of trade receivables through multiple financiers. What is a Factoring Unit? Factoring unit refers to trade receivable in the form of invoice / bill uploaded either by the seller (in the case of factoring) or by the buyer (in case of reverse factoring), as the case may be. Who are the participants in TReDS? Seller – Micro, Small and Medium Enterprise (MSME) Buyer – any person liable to the seller, whether under a contract or otherwise, against an invoice or bill of exchange, to pay any trade receivable Financier – all entities / institutions permitted to undertake factoring business under the Factoring Regulation Act, 2011 Insurance companies  Credit Guarantee Fund Trust notified by the Government of India Who can operate TReDS platforms? An entity shall seek authorisation fr...
Post a Comment
Read more

Transfer of Surplus by the RBI to the Government

The surplus payable by the Reserve Bank of India (RBI) to the Central Government for the financial year 2025-26 amounted to ₹2,86,588.46 crore.  Why does the RBI transfer the surplus amount to the Central Government? As per section 47 of the RBI Act, 1934, after making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and other provisions, the balance of the profits of the RBI is required to be paid to the Central Government. Also, the Central Government holds 100% of the share capital of the RBI. How much risk provision is required to be maintained by the RBI? The RBI developed the Economic Capital Framework (ECF) during 2014-15 and 2015-16 for determining the appropriate level of risk provisions to be made under the provisions of section 47 of the RBI Act, 1934.  In November 2018, the RBI, in consultation with the Government, constituted an Expert Committee to review the ECF of the RBI (Chairman: Dr. Bimal Jalan, fo...
Post a Comment
Read more

Swap Facility for FCNR (B) Deposits, ECBs and OFCBs (updated as on June 23, 2026)

Reserve Bank of India (RBI) has introduced US Dollar-Rupee swap facility for Foreign Currency Non-Resident (Bank) [FCNR (B)] deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs). Swap facility for FCNR (B) deposits Swap facility for ECBs and OFCBs The swap facility has been introduced for fresh FCNR (B) deposits, including deposits that are renewed upon maturity, for a minimum tenor of 3 years and a maximum tenor of 5 years. The swap facility has been introduced for – ECBs of average maturity of 3 years and above, drawn on after June 8, 2026 till December 31, 2026 by – (a) Public Sector Undertakings (PSUs) whose majority ownership is held by the central and / or state government (other than banks), or (b) PSUs which are incorporated, established or registered under a Central or State Act and controlled by the central / state government. The facility will also be available for the undrawn portion of any exist...
Post a Comment
Read more

Payment of Agency Commission to Agency Banks (ABs) and Disbursement of Government Pension by ABs

Reserve Bank of India (RBI) has issued guidelines on the conduct of Government business by Agency Banks (ABs), payment of agency commission to ABs and disbursement of Government pension by ABs. Who are ABs? ABs mean all Public Sector Banks (PSBs), scheduled Private Sector Banks (PVBs), scheduled Payments Banks (PBs), and scheduled Small Finance Banks (SFBs) appointed by the RBI under Section 45 of the RBI Act, 1934, by mutual agreement, to carry out Government banking business of the Central Government (CG) / State Governments (SGs). What is agency commission? Agency commission means the remuneration paid by the RBI to an AB in consideration of it acting as an agent of the RBI in the conduct of general banking business of the CG and the SGs at the places and in the manner specified in the agreement between the RBI and the bank, with the exception of the functions relating to the management of the public debt. What are the guidelines on appointment of ABs? Any eligible bank which intend...
Post a Comment
Read more

Highlights of RBI Annual Report 2025-26 – Chapter 7 to 12

Reserve Bank of India (RBI) has published its annual report for the financial year 2025-26. In a series of articles, we will go through the highlights of the report. This is the fifth and final article in the series.  Chapter 7 – Public Debt Management The ways and means advances (WMA) limit for the Government of India (GoI) for H1:2025-26 (April to September 2025) was fixed at ₹1,50,000 crore and for H2:2025-26 (October 2025 to March 2026) was fixed at ₹50,000 crore. The RBI entered into an agreement with the Government of National Capital Territory of Delhi (GNCTD), under Section 21A(1) of the RBI Act, 1934, to carry on the general banking business of GNCTD and manage its rupee public debt. The WMA limit of GNCTD was set at ₹890 crore, taking the aggregate WMA limit of all the states / UTs to ₹61,008 crore. The RBI introduced Separate Trading of Registered Interest and Principal of Securities (STRIPS) in the state government securities. Retail Direct Gilt (RDG) account – An au...
Post a Comment
Read more