The Reserve Bank of India (RBI) on Friday extended the scope of its electronic trading platform — Negotiated Dealing System (NDS) —to the secondary market. With a view to widening the secondary market in government securities to involve more participants, the RBI said it has been decided to extend direct access to NDS-Order Matching (NDS-OM) to licensed urban co-operative banks (UCBs) and Systemically Important Non-Deposit taking non-banking financial companies (NBFC-ND-SIs). The RBI statement said that NBFC-ND-SIs can now acquire shares, stock, bonds, debentures or securities issued by a government or local authority or other marketable securities. However, the RBI notes that the extension of direct membership of NDS-OM to licensed UCBs and NBFC-ND-SIs is subject to the comfort of the respective regulatory department of the RBI and those who are eligible are advised to furnish a no-objection certificate from their respective regulatory departments while applying for an NDS-OM membership. Some of the financial criteria and other requirements for direct access to NDS-OM for the above entities include a subsidiary general ledger (SGL) account with RBI, membership of NDS, Indian financial network (INFINET) connectivity and membership of the Clearing Corporation of India, to name a few.
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