Introduction The system of PDs in the Government Securities (G-Sec) market was introduced in 1995 to strengthen the infrastructure in the G-Sec market, improve secondary market trading system, which would contribute to price discovery, enhance liquidity and turnover and encourage voluntary holding of G-Sec amongst a wider investor base and make PDs an effective conduit for conducting open market operations (OMO). The current guidelines to authorise PDs in the Indian G

1. Objective The objective of introducing Credit Default Swaps (CDS) on corporate bonds is to provide market participants a tool to transfer and manage credit risk in an effective manner through redistribution of risk. CDS as a risk management product offers the participants the ability to hive off credit risk and also to assume credit risk which otherwise may not be possible. Since CDS have benefits like enhancing investment and borrowing opportunities and reducing t

Annex Draft guidelines for issuance of Non-Convertible Debentures (NCDs) of maturity less than one year 1. Definition For the purpose of these guidelines, Non-Convertible Debentures (NCDs) will mean secured, negotiable money market instruments with original maturity of less than one year issued by corporates (including NBFCs) to meet their short term funding requirements, issued by way of private placement with investors. The guidelines also cover NCDs with original m

The Mid-Term Review of the Annual Policy for the year 2007-08 had indicated that the Reserve Bank will permit market repo in corporate bonds once the corporate debt market develops and the Reserve Bank is assured of the availability of fair prices, and an efficient and safe settlement system based on delivery versus payment (DvP) III and Straight Through Processing (STP) is in place. In pursuance thereof, as indicated in the Annual Policy Statement for the year 2009-1

As announced in the Annual Policy Statement for the year 2005-06, it has now been decided that permitted structure of PD business will be expanded to include banks, which fulfill certain minimum criteria subject to safeguards. Accordingly, banks are eligible to apply for Primary Dealership, subject to the following guidelines. 2. The following categories of banks would be eligible to apply for PD license. (RBI's approval would be subject to compliance with all other r