About Negotiated Dealing System-Order Matching:
- It was launched in 2005 by the Reserve Bank of India.
- It is a screen based electronic anonymous order matching system for secondary market trading in Government securities owned by RBI.
- Presently the membership of the system is open to entities like Banks, Primary Dealers, Insurance Companies, Mutual Funds etc.
- All central government securities, state government securities and treasury bills are tradable on the NDS-OM Web Module.
- Additionally, it allows members to negotiate bilaterally through “Request for Quote”
- The system is designed to bring transparency to secondary market transactions while enabling members to place bids and offers directly on the NDS-OM screen.
- There are two types of NDS-OM members, including:
- Direct Members: Direct members have current accounts with the RBI and can directly settle trades on NDS-OM.
- Indirect Members: Indirect members do not have current accounts with the RBI and must settle through NDS-OM members that have direct accounts.
- Most foreign institutional investors have indirect access, while resident entities may have direct access.
- Trade Settlement: Under this trades are settled at T+1 and guaranteed by Clearing Corporation of India Limited (CCIL).
- Benefits:
- Wider market access; level playing field for all.
- Immediate dissemination of market info
- Lower transaction cost.
