Retail Direct Scheme - Market Making - ആർബിഐ - Reserve Bank of India
Retail Direct Scheme - Market Making
RBI/2021-22/147 January 04, 2022 All Primary Dealers Dear Sir/Madam Retail Direct Scheme – Market Making RBI Retail Direct Scheme has been launched on November 12, 2021 for providing one-stop access to facilitate investment in Government Securities by retail investors. In this connection, to provide liquidity in the secondary market, a market making arrangement, wherein the Primary Dealers shall be present on the NDS-OM platform (odd-lot and Request for Quotes segments) throughout market hours and respond to buy/sell requests from Retail Direct Gilt Account Holders (RDGAHs), is enclosed as Annex. Yours faithfully (Latha Vishwanath) Encl: as above RBI Retail Direct Scheme – Market Making In exercise of the powers conferred under Section 29(2) of the Government Securities Act 2006, the Reserve Bank of India, hereby, issues the following Market Making Scheme: 1. Objective of the Scheme To promote retail participation in Government Securities by providing prices/quotes to Retail Direct Gilt (RDG) account holders enabling them to buy/sell securities under the RBI Retail Direct Scheme. 2. Definitions In this scheme, unless the context otherwise requires:
3. Applicable entities All Primary Dealers. 4. Obligations of Primary Dealers: A. In the Odd Lot segment: Primary Dealers (PDs) may provide buy and sell quotes on the NDS-OM odd lot segment as below:
B. In the Request-For-Quotes (RFQ) segment:
5. Simplified KYC for transaction with RDG account holders in RFQ segment Rule 9 sub-rule 14 clause (i) of The Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, provides for simplified measures to verify the client’s identity. Therefore, it is, hereby, prescribed that the PDs shall rely on the Know Your Customer (KYC) verification of the RDG account holders done under the retail direct scheme. No further KYC verification is required for transacting with RDG account holders on the RFQ segment of NDS-OM. 6. Facilities/Incentives for fulfilling the obligations: A. Switching securities with RBI - A special Switch window will be opened for PDs every month, wherein PDs may switch the illiquid/semi-liquid securities acquired through RFQ segment from RDG account holders with liquid securities from RBI at FBIL/market prices. B. Inclusion of successful trades in the annual target for PDs for achieving turnover with mid-segment and retail investors - All successful trades under the Retail Direct scheme will be reckoned towards fulfilling the annual target for turnover with mid-segment and retail investors prescribed to each PD respectively. 7. Performance Monitoring:
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