Mumbai: Retail participants can now manage their government bond holdings directly, with the help of a web-based trading platform supported and run by the Clearing Corporation of India Limited (CCIL). Bond holders have been allowed to initiate trade in the secondary market. However, there would be limits stipulated by primary members, according to regulatory norms.
To promote retail participation in sovereign debt, the Reserve Bank of India (RBI) had allowed direct access to bond holders in the Annual Monetary and Credit Policy for 2012-13. Yesterday, RBI said the web-based platform had been implemented and could be accessed at www.ndsind.com. Currently, banks and financial institutions are the major investors in government debt.
To gain access to the Negotiated Dealing System-Gilts Order Matching System (NDS-OM), or the secondary market for government bonds, retail participants have to submit a request with the primary member, who would ensure know-your-customer norms are fulfiled. The primary member would then approach CCIL with e-tokens, digital certificates and passwords for its users.
Currently, NDS-OM has 161 active primary members, including banks, primary dealers, insurance companies, mutual fund companies and provident funds.
A gilt account holder can log in, watch online security movements and place orders instantly, within the price or yield range stipulated by its primary member. RBI has said since the primary member would be responsible for trade initiated by its clients, it can monitor and hold, or cancel, the order if need arises. A pop-up notification and deal ticket for the client would help keep track of successful deals.
Yesterday, IDBI Bank’s primary dealer wing said it had enabled one of its clients to access the secondary market using the new platform, and others were expected to follow.
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