The Negotiated Dealing System (NDS) is a facilitator platform for the purchase and sale of Government securities. The members who maintain their Subsidiary General Ledger (SGL) and or Current Account with RBI can participate in the auctions using this platform. Participants are primary dealers, commercial banks, and a few Financial Institutions who are permitted to open and maintain Gilt Accounts for their constituents. These bids for the purchase of government securities can be made when the RBI conducts auctions for them through an electronic platform. Retail investors now have the opportunity to buy government bonds in the primary market, where the Reserve Bank of India sells new sovereign debt securities. Specified stock exchanges, in addition to scheduled banks and primary dealers (bond houses), will be permitted to act as aggregators/facilitators for retail investor bids in the non-competitive segment for the auction of dated securities and treasury bills of the Government of India.
The NDS auction process takes place one for the primary market and the other for the secondary market. In the secondary market (the market for trading the already issued G-Secs), the NDS facilitates the settlement of transactions in G-Secs. In the secondary market, NDS provides an interface to the Public Debt Office, RBI – Mumbai for the settlement of transactions.
NDS-OM
RBI launched the Negotiated Dealing System-Order Matching system (NDS-OM) in 2005 to enhance secondary market activity in the G-Sec segment. The NDS-OM is a screen-based electronic anonymous order matching system for secondary market trading in Government securities. Presently, NDS-OM accounts for over 75% of all secondary market dealing in Government Securities (GSecs). This is an order-driven electronic system, where the participants can trade anonymously by placing their orders on the system or accepting the orders already placed by other participants. The Clearing Corporation of India on behalf of the RBI operates the NDS-OM. Click WHAT IS NDS-OM WEB
Related articles: Now individuals can directly invest in G-securities with RBI. Read the following post for details.
Do you know what is RBI Retail Direct Scheme and facilities available to individuals?
