Access of SEBI-Registered Non-Bank Brokers to NDS-OM
The Reserve Bank of India (RBI) has issued new guidelines under the Master Direction – Reserve Bank of India (Access Criteria for NDS-OM) Directions, 2025, allowing SEBI-registered non-bank brokers to access the Negotiated Dealing System – Order Matching (NDS-OM) platform. This initiative aims to enhance retail investor participation in the government securities (G-Sec) market. The revised access criteria supersede the 2024 guidelines issued on October 18, 2024, and come into immediate effect.
Definitions & Key Concepts
- NDS-OM: An Electronic Trading Platform (ETP) authorized by the RBI for trading government securities.
- Direct Access: Entities execute transactions directly on NDS-OM and settle in their own Subsidiary General Ledger (SGL) account.
- Indirect Access: Transactions are routed through an entity with direct access that assumes settlement responsibility.
- Stock Broker Connect: Allows stock brokers to provide retail clients with NDS-OM access via their SEBI-registered demat accounts.
- Designated Settlement Bank (DSB): A bank appointed for settlement of fund obligations for members who do not have a current account with the RBI.
Eligibility for NDS-OM Access
- Direct Access: The following entities can directly access NDS-OM:
- Banks, Primary Dealers, NBFCs (including Housing Finance Companies), All India Financial Institutions (AIFIs), Mutual Funds, Provident Funds, Pension Funds, Insurance Companies, and Market Infrastructure Institutions (MIIs).
- Requirements:
- Must have an SGL account with RBI.
- Maintain a current account with RBI or a DSB.
- Be a member of CCIL’s securities settlement segment.
- Indirect Access: Available to entities not eligible for direct access or those choosing to route trades through an intermediary.
- Stock Broker Connect: Individual investors can access NDS-OM through SEBI-registered brokers linked with CCIL members.
Application & Compliance
Entities must apply to RBI’s Financial Markets Regulation Department for direct access. RBI retains discretion to approve, reject, or terminate access based on regulatory compliance and public interest. Any entity violating RBI’s directions or engaging in market abuse may face suspension or termination.
Impact & Conclusion
This framework deepens the G-Sec market by enabling broader participation, improving liquidity, and empowering retail investors. By integrating SEBI-registered brokers, the RBI fosters market efficiency and transparency in India’s fixed-income securities ecosystem.
