Direct Access to Negotiated Dealing System-Order Matching (NDS-OM)

RBI/2011-12/265
IDMD.DOD.No.13 /10.25.66/2011-12, Date- November 18, 2011

Direct Access to Negotiated Dealing System-Order Matching (NDS-OM)

Please refer to our circular IDMD.DOD.No. 5893 /10.25.66/ 2007-08 dated May 27, 2008 on access to NDS-OM.

2. With a view to widening the secondary market in Government Securities to more number of participants, it has been decided to extend direct access to NDS-OM to licensed Urban Co-operative Banks (UCBs) and Systemically Important Non-Deposit taking Non-Banking Financial Companies (NBFC-ND-SIs) falling under the purview of Section 45-I (c) (ii) of the Reserve Bank of India (RBI) Act, 1934 (i.e. NBFC-ND-SIs which carry on as their business or part of their business the activity of acquisition of shares, stock, bonds, debentures or securities issued by a Government or local authority or other marketable securities of a like nature). The financial criteria and other requirements for direct access to NDS-OM for the above entities are furnished in the Annex.

 3. It may, however, be noted that extension of direct membership of NDS-OM to licensed UCBs  and NBFC-ND-SIs [under Section 45-I (c) (ii) of the RBI Act, 1934] is subject to the comfort  of the respective regulatory department of the Reserve Bank of India. Hence, all licensed UCBs and NBFC-ND-SIs which are eligible to obtain direct access to NDS-OM as per the criteria laid down in the Annex are advised to furnish a No-Objection Certificate from their respective regulatory departments while applying for NDS-OM membership.

Yours faithfully,

(Sanjay Hansda)
Director & Officer-in-Charge

Annex

Criteria for direct access to NDS-OM

1. Licensed UCBs :

1. Current account with RBI or a funds account with one of the Designated Settlement Banks (DSBs) chosen by Clearing Corporation of India Limited (CCIL) for funds settlement.
2. Subsidiary General Ledger (SGL) Account with RBI.
3. Membership of Negotiated Dealing System (NDS).
4. Indian Financial Network (INFINET) connectivity.
5. Membership of CCIL.
6. Minimum Capital to Risk Weighted Assets Ratio (CRAR) of 9%.
7. Net Non-Performing Assets (NPA) of less than 5%.
8. Minimum net worth of Rs. 25 crore.

2. NBFC-ND-SIs [under Section 45-I-(c) (ii) of the RBI Act, 1934] :

1. Current account with RBI or a funds account with one of the Designated Settlement Banks (DSBs) chosen by Clearing Corporation of India Limited (CCIL) for funds settlement.
2. Subsidiary General Ledger (SGL) Account with RBI.
3. Membership of Negotiated Dealing System (NDS).
4. Indian Financial Network (INFINET) connectivity.
5. Membership of CCIL.
6. Minimum Net Owned Funds of Rs. 100 crore.
7. Net NPAs of less than 3% for the past 3 years.
8. Net Profit for the past 3 years.

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