Informist, Friday, Feb. 7, 2025

MUMBAI – In order to facilitate trades of retail investors, the Reserve Bank of India on Friday notified guidelines to make the Negotiated Dealing System – Order Matching platform available for access by non-bank brokers registered with the Securities and Exchange Board of India. The NDS-OM platform is an electronic mode of trading government securities, developed by the RBI and hosted by Clearing Corp. of India Ltd.

The directions come after RBI Governor Sanjay Malhotra, while detailing the outcome of the Monetary Policy Committee meeting earlier in the day, announced that non-bank brokers registered with the Securities and Exchange Board of India will now be able to trade on the NDS-OM.

Under the directions, an eligible stockbroker is one who has an agreement with an entity that is a member of the securities' settlement segment of the Clearing Corp. of India in terms of which the clearing member agrees to assume responsibility for the settlement of transactions undertaken by the constituents or clients of the stockbroker.

The RBI said that the approval given to a stockbroker for accessing the platform is not transferable. "The Reserve Bank may initiate such steps as may be necessary, including imposing additional conditions, if the entity is found to violate the provisions of these directions or any other rules or regulations or conditions for using the facility," it said.

Under the guidelines, the central bank may suspend or terminate the approval provided to a stockbroker after affording a reasonable opportunity to be heard, if it is satisfied that the entity has ceased to be eligible for providing access to its constituents or clients to NDS-OM or if the entity has violated a statutory provision or any rule or regulation issued by the apex bank.

The RBI may also opt for suspension or termination of approval provided to a stockbroker if the entity has committed a market abuse as defined under the RBI's (Prevention of Market Abuse) Directions, 2019 or if the entity's continuance of access is prejudicial to public interest or financial system of the country.

Further, the RBI holds the discretion in approving, rejecting or terminating the facility to a stockbroker considering the need to ensure robustness of the market infrastructure and development of financial markets or in public interest or to regulate the financial system of the country to its advantage. "The decision of the Reserve Bank, to approve or reject the application of the stock broker or to terminate the facility would be final," it said. The directions issued Friday shall come into effect immediately. End

Reported by Srijita Bose

Edited by

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