Mumbai: The Reserve Bank of India (RBI) has notified its Retail Direct Scheme, under which retail participation in government securities will be encouraged by providing prices and quotes to Retail Direct Gilt (RDG) account holders, which will help them trade in securities. .
The scheme was launched by the Prime Minister on November 12, 2021, where retail investors have the facility to open an online RDG account with RBI. These accounts can be linked to their savings bank accounts.
Individuals’ RDG accounts can be used to issue government securities and participate in secondary market operations through screen-based NDS-OMs.
NDS-OM or Negotiated Dealing Segment- Order Matching refers to RBI’s screen-based, anonymous electronic order matching system for trading in government securities in the secondary market.
In this regard, in order to provide liquidity in the secondary market, a market-making arrangement wherein the primary dealers will be present on the NDS-OM platform throughout the market hours and respond to buy/sell requests from Retail Direct Gilt Account Holders (RDGAH). Will give notified.
As per the market making scheme, the primary dealers will rely on Know Your Customer (KYC) verification of RDG account holders done under the Retail Direct Scheme.
“The transactions with RDG account holders on the request of Quotation (RFQ) section of the NDS-OM do not require further KYC verification,” RBI said.
RFQ clause refers to the on-screen negotiation mechanism of NDS-OM system of RBI.
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