Skip to main content

Directions on Access Criteria for NDS-OM

Reserve Bank of India (RBI) has issued directions on access criteria for NDS-OM.

What is NDS-OM?

  • Negotiated Dealing System-Order Matching (NDS-OM) is the Electronic Trading Platform (ETP) authorised by RBI for transactions in Government securities.
  • It is an anonymous screen-based order matching module, where the participants can trade anonymously by placing their orders on the system or accepting the orders already placed by other participants. 
  • It is operated by Clearing Corporation of India Limited (CCIL) on behalf of RBI. 

Who can access NDS-OM?

Any person / entity eligible to invest in Government securities shall be eligible to access NDS-OM either through direct access or through indirect access.

  • 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.
  • 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.

Which entities are eligible for direct access to NDS-OM?

The following entities shall be eligible for direct access to NDS-OM –

  1. Banks (including Local Area Bank, Payment Bank, Small Finance Bank and Regional Rural Bank) 
  2. Standalone Primary Dealers
  3. Non-Banking Financial Companies (NBFCs) including Housing Finance Companies (HFCs)
  4. All India Financial Institutions (AIFIs) – Export-Import Bank of India (EXIM Bank), National Bank for Agriculture and Rural Development (NABARD), National Housing Bank (NHB), Small Industries Development Bank of India (SIDBI) and National Bank for Financing Infrastructure and Development (NaBFID)
  5. Mutual Funds
  6. Provident Funds
  7. Pension Funds
  8. Insurance Companies
  9. Regulated Market Infrastructure Institutions (MIIs) for investing their settlement guarantee fund in Government securities, as RBI may specifically permit 
  10. Any other entity that RBI may specifically permit

What are the requirements for seeking direct access to NDS-OM?

Entities that are eligible to seek direct access to NDS-OM shall fulfil the following requirements –

  • SGL account with RBI
  • Current account with RBI or a Designated Settlement Bank
  • Membership of securities settlement segment of CCIL

Designated Settlement Bank (DSB) means a bank appointed by CCIL for the settlement of fund obligations of members of their securities settlement segment that are not maintaining a current account with RBI.

Which entities are eligible for indirect access to NDS-OM?

  • Any person / entity eligible to invest in Government securities may avail indirect access to NDS-OM if –
    • It is not an entity eligible for direct access to NDS-OM; or
    • It does not satisfy the requirements to seek direct access to NDS-OM; or
    • It is not granted direct access to NDS-OM.
  • Any entity that is permitted to maintain both SGL and constituent account may, at its discretion, choose to avail indirect access to NDS-OM, instead of direct access.


References

Reserve Bank of India. (2020, April 01). 'Government Securities Market in India – A Primer'. Retrieved from https://www.rbi.org.in/Scripts/FAQView.aspx?Id=79

Reserve Bank of India. (2024, October 18). 'Reserve Bank of India (Access Criteria for NDS-OM) Directions, 2024'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12742&Mode=0


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

FX Global Code

Reserve Bank of India (RBI) has signed its renewed Statement of Commitment (SoC) to the FX Global Code.  What is FX Global Code? FX Global Code is a set of global principles of good practice in the foreign exchange market. The Code contains 55 principles that provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. The principles cover ethics, governance, execution, information sharing, risk management and compliance as well as confirmation and settlement. The establishment of the Code was facilitated by the Foreign Exchange Working Group (FXWG), which operated under the auspices of the BIS Markets Committee.  The Code was developed by a partnership between central banks and market participants from around the globe and was first published in 2017. The Code promotes a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of market participants, supported by resilient infras...
Post a Comment
Read more

Amendments in / additions to forex guidelines

Reserve Bank of India (RBI) has amended various forex guidelines. This article lists out some of the such recent amendments. What are the updates in the existing guidelines? Previous guidelines Revised guidelines Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills and non-convertible debentures / bonds and commercial papers issued by an Indian company. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. The balance...
Post a Comment
Read more

Nomination for demat accounts and mutual fund folios

Securities and Exchange Board of India (SEBI) had revised the guidelines on nomination for demat accounts and mutual fund folios.   Which entities are covered by the guidelines? The following regulated entities (REs) are covered by the guidelines – Asset Management Companies (AMCs) of Mutual Funds (MFs) and their Registrars to an issue and share Transfer Agents (RTAs)  Association of Mutual Funds in India (AMFI)  Recognized Depositories  Registered Depository Participants (DPs) What are the guidelines on nomination facility? Nomination shall be mandatory for single holding and optional for jointly held accounts / folios. However, an investor having single holding / account / folio can opt-out of nomination, either online or through physical / offline mode. In case a joint account / folio becomes single holding, post the demise of holders, either nomination or ‘opt-out’, is mandatory. Investors shall have the option to specify guardians when nominees are minors....
Post a Comment
Read more

Nomination Facility in Banks

Reserve Bank of India (RBI) has issued directions on nomination facility in deposit accounts, safe deposit lockers and articles kept in safe custody with the banks. What is the legal framework for nomination facility in banks? Banking Regulation Act, 1949 (BR Act) contain provisions on nomination facility in banks. Section 45ZA – Nomination for payment of depositors' money  Where a deposit is held by a banking company to the credit of one or more persons, the depositor / all the depositors together, may nominate one person to whom in the event of his / their death, the amount of deposit may be returned by the banking company. Where the nominee is a minor, the depositor shall appoint any person to receive the amount of deposit in the event of his death during the minority of the nominee. Section 45ZC – Nomination for return of articles kept in safe custody with banking company  Where any person leaves any article in safe custody with a banking company, such person may nominate ...
Post a Comment
Read more

Recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)

Reserve Bank of India (RBI) has invited applications for recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs). What is the basis of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)? Reserve Bank of India (RBI) had issued ‘ Omnibus Framework for recognition of Self-Regulatory Organisations for Regulated Entities of the Reserve Bank ’ dated March 21, 2024, wherein broad parameters, viz., objectives, responsibilities, eligibility criteria, governance standards, application process, etc., were specified. It was also stated that other sector-specific guidelines like number of SROs, membership, etc., shall be issued separately whenever a sectoral SRO is intended to be set up. RBI has now invited applications for recognition of SROs for the NBFC sector under the aegis of the aforesaid omnibus framework.  What are the membership criteria for the SRO for NBFCs? The SRO for NBFC sector is primarily envisaged for NBFCs...
Post a Comment
Read more