SEBI on Tuesday mandated brokers to ascertain a separate enterprise unit (SBU) to commerce in authorities securities (G-Secs) by means of the Negotiated Dealing System–Order Matching (NDS-OM).
This follows the Reserve Financial institution of India’s announcement on the latest financial coverage briefing to increase entry of NDS-OM to non-bank brokers to facilitate retail participation. NDS-OM is an digital order-matching system used for secondary market buying and selling in G-Secs. Earlier, NDS-OM was accessible solely to regulated entities and to the purchasers of banks and standalone main sellers.
The SBUs will solely deal with transactions on the NDS-OM platform, SEBI mentioned in a round.
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Ring-fence NDS-OM
It directed brokers to ring-fence the NDS-OM unit from different securities-market associated actions and preserve an arm’s size relationship.
Brokers should preserve distinct accounts for the SBU, the web value standards for the inventory broking entity to be glad excluding the SBU’s funds.
Additional, the regulator has clarified that its complaints redressal system (SCORES), in addition to the grievance redressal mechanism and Investor Safety Fund (IPF) of inventory exchanges won’t cowl buyers utilizing the SBU’s providers.
