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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


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