RBI consolidates rules for outright, when-issued & short-sale G-sec trades
Mumbai, Jun 25, 2026
Draft master directions bring together rules for government securities trading, widening market access while consolidating norms on reporting, settlement and short selling
The Reserve Bank of India (RBI) on Thursday released draft master directions on secondary market transactions in government securities, bringing under a single framework the rules governing outright trades, when-issued transactions and short selling.
The central bank has invited comments on the draft directions from market participants and other stakeholders.
The draft expands the scope of the framework to explicitly cover a wider set of market participants, including retail investors, demat account holders and investors transacting through recognised stock exchanges, in addition to entities accessing the Negotiated Dealing System-Order Matching (NDS-OM) platform.
Individuals holding demat accounts through depository participant banks that are direct members of NDS-OM will be able to undertake transactions on the platform. The draft also incorporates participation through the Stock Broker Connect facility and transactions undertaken through the RBI Retail Direct Scheme.
The central bank has proposed that direct members of NDS-OM provide web-based access to constituent gilt account holders for undertaking transactions in government securities. Individual constituent gilt account holders and eligible demat account holders would be provided such access on request.
The draft consolidates provisions relating to the reporting, settlement and trading of government securities that are currently spread across multiple regulations and circulars. Transactions undertaken outside NDS-OM would continue to be reported to the platform within 15 minutes of execution, while transactions would be settled on a delivery-versus-payment basis through the Clearing Corporation of India Ltd (CCIL) or any other clearing agency approved by the RBI.
The proposed directions also bring together the existing framework for when-issued transactions and short sales. Scheduled commercial banks, standalone primary dealers, urban co-operative banks and other regulated entities permitted by their respective financial sector regulators would continue to be eligible to undertake short-sale transactions in central government securities, excluding Treasury Bills.
The draft retains position limits for short-sale transactions and prescribes that such positions be covered within three months from the date of the transaction. It also requires short-sale and when-issued transactions to be subject to concurrent audit for compliance with regulatory requirements.
[The Business Standard]
