FAQs - NDS OM Secondary Market
What is NDS-OM?
NDS OM is an anonymous screen-based order matching system for secondary market dealing in government securities. 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. Anonymity ensures a level playing field for various categories of participants. NDS-OM is owned by RBI. Direct access to the NDS-OM system is currently available only to select financial institutions like Commercial Banks, Primary Dealers, well managed and financially sound UCBs and NBFCs, etc. Other participants can access this system through their Primary members i.e. with whom they maintain Gilt Accounts.
What is NDS-OM Web?
RBI launched NDS-OM-Web on June 29, 2012 for facilitating direct participation of gilt account holders (GAH) on NDS-OM through their primary members (PM) (as risk controller only and not having any role in pricing of trade). The GAH have access to the same order book of NDS-OM as the PM. GAH are in a better position to control their orders (place/modify/cancel/hold/release) and have access to real time live quotes in the market. Since notifications of orders executed as well as various queries are available online to the GAH, they are better placed to manage their positions. Web based interface that leverages on the gilt accounts already maintained with the custodian Banks/PDs provides an operationally efficient system to retail participants. NDS OM Web is provided at no additional cost to its users. PMs, however, may recover the actual charges paid by them to CCIL for settlement of trades or any other charges like transaction cost, annual maintenance charges (AMC) etc. It has been made obligatory for the Primary Members to offer the NDS-OM-Web module to their constituent GAHs (excluding individual) for online trading in G-sec in the secondary market.
What is NDS-OM Retail Portal?
Access to NDS-OM by the retail segment, comprising of individual investors having RETAIL DIRECT GILT ACCOUNTS (RDG), desirous of participating in the G-Sec market is facilitated by allowing them to use their RDG accounts for their transactions and holdings in G-Sec. This access would be facilitated directly without the investor having to come through a Bank or Intermediary. The scheme facilitates efficient access to retail individual investor to the same G-Sec market being used by the large institutional investor in a seamless manner.
The Retail Platform has been enhanced to incorporate linkages to payment gateways, to enable direct transfer of funds by retail investors . This functionalities would give direct control to the retail investors over their orders without the need to get in touch with their Primary Member.
NDS OM Features and Benefits
The features of NDS OM are as under:
- Coverage – All CG, SG, &T-Bills Securities
- Pre & Post Trade Anonymity
- Real Time Information Dissemination
- T+ 1 trading from 9:00 am to 5:00 pm.
- STP linkages for Settlement to CCIL (acting as CCP) with DVP III settlement)
- Separate Order Books for Standard & Odd Lot Markets
- Operational Risk Controls Available
The benefits of NDS OM has been identified as under:
- Efficient Price Discovery-narrow bid/ask spreads
- Level Playing Field
- Lower Transaction Time
- Reduced Search Time & Costs
- STP Environment
- Lower Operating Costs-No confirmations
- Wider Geographical Coverage
- Comprehensive Audit Trails
- Better Regulatory Surveillance & Oversight
NDS OM Statistics in brief
- Date of launch : 01-Aug-2005
- No. of Participants : 210
- Avg. Daily Volume : Rs. 30,000 Crs.
Market Watch/Price Information
In addition to the NDS OM Application, the price information can be seen on CCIL website The best bid and offer price, the quantity available at that price, the Last traded Price (LTP) etc are shown for each security.
NDS-OM Market Watch
NDS-OM Market Depth
The best five bid and offer are shown in the Market By Price (MBP) screen
ODD Lot Segment
NDS OM has two segments:- Standard Lot segment wherein trades happen in multiples of Rs 5 crores. For the Retail Investor there is an Odd Lot segment, wherein trades can happen in multiples of Rs 10000/-.
Settlement and Risk Management
The securities and funds are settled on a net basis i.e. Delivery versus Payment System-III (DvP-III). CCIL guarantees settlement of trades on the settlement date by becoming a central counter-party (CCP) to every trade through the process of novation, i.e., it becomes seller to the buyer and buyer to theseller. All outright secondary market transactions in G-Secs are settled on a T+1 basis.
Role of the Clearing Corporation of India Limited (CCIL)
The CCIL is the clearing agency for G-Secs. It acts as a Central Counter Party (CCP) for all transactions in G-Secs by interposing itself between two counterparties. In effect, during settlement, the CCP becomes the seller to the buyer and buyer to the seller of the actual transaction. All outright trades undertaken in the OTC market and on the NDS-OM platform are cleared through the CCIL.