CIRCULAR
SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/9 January 09, 2023
To,
Recognised Stock Exchanges and Clearing Corporations;
Registered Depositories;
Madam/ Sir,
Sub: Mode of settlement for trades executed on the Request for Quote (RFQ)
platform
1. SEBI vide circular no. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/142 dated October
19, 2022 on ‘Request for Quote (RFQ) platform for trade execution and settlement of
trades in listed Non-convertible Securities, Securitised Debt Instruments, Municipal
Debt Securities and Commercial Paper’ has permitted stock brokers registered under
the debt segment of the Stock Exchange(s) to place/ seek bids on the RFQ platform
on behalf of client(s), in addition to the existing option of placing bids in a proprietary
capacity.
2. Further, SEBI vide circular no. SEBI/HO/DDHS/P/CIR/2022/00144 dated October 28,
2022 on ‘Reduction in denomination for debt securities and non-convertible
redeemable preference shares’ inter-alia modified the face value of the listed debt
security and non-convertible redeemable preference share issued on private
placement basis traded on a stock exchange or OTC basis from Rs. Ten Lakh to Rs.
One lakh.
3. Furthermore, SEBI vide circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/
2022/154 dated November 14, 2022 on ‘Registration and regulatory framework for
Online Bond Platform Providers’ inter-alia stipulated that all the orders with respect
to listed debt securities placed on an online Bond Platform shall be mandatorily
routed through the RFQ platform of the recognised Stock Exchange(s) and settled
through the respective Clearing Corporations.
4. As a matter of practice, presently, Stock Exchanges are using Real-Time Gross
Settlement (RTGS) channel as a mode of settlement for trades executed on the RFQ
platform with respect to listed corporate bonds, commercial paper, and securitised
debt instruments. Stock Exchanges and market participants have sought clarification
as to whether payment mechanisms other than RTGS provided by banks/ payment
aggregators can be permitted for settlement of trades executed on the RFQ platform.
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5. It is clarified that, in addition to the existing payment mechanisms, payment
mechanisms provided by banks/ payment aggregators authorised by Reserve Bank
of India, from time to time, may be used for settlement of trades executed on the RFQ
platform.
6. The Stock Exchanges and Clearing Corporations are directed to:
6.1. put in place necessary infrastructure for this purpose.
6.2. bring the provisions of this circular to the notice of the Stock Brokers and also
disseminate the same on their websites; and
6.3. make necessary amendments to the relevant bye-laws, rules and regulations for
the implementation of the above directions in coordination with one another to
achieve uniformity in approach and communicate to SEBI.
7. This circular shall come into force with immediate effect.
8. The Circular is issued in exercise of the powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 read with Regulation 55 (1) of the
SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021, Regulation
29 of the SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015
and Regulation 48 of the SEBI (Issue and Listing of Securitised Debt Instruments and
Security Receipts) Regulations, 2008, to protect the interest of investors in securities
and to promote the development of, and to regulate the securities market.
9. This Circular is available at www.sebi.gov.in under the link “LegalCirculars”.
Yours faithfully,
Pradeep Ramakrishnan
General Manager
Department of Debt and Hybrid Securities
+91-22-26449246
pradeepr@sebi.gov.in
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