CIRCULAR
SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/14 February 11, 2025
To,
All recognized Stock Exchanges
Stock Brokers through Recognized Stock Exchanges
Dear Madam / Sir,
Sub: Facilitation to SEBI registered Stock Brokers to access Negotiated Dealing
System-Order Matching (NDS-OM) for trading in Government Securities-
Separate Business Units (SBU)
1. Reserve Bank of India vide its notification dated February 07, 2025 permitted access
of SEBI-registered non-bank brokers to Negotiated Dealing System-Order Matching
(NDS-OM) through Master Direction - Reserve Bank of India (Access Criteria for
NDS-OM) Directions, 2025.
2. In order to facilitate SEBI-registered stock brokers to participate in Government
Securities (G-Secs) market in the NDS-OM, it has been decided that they may do
so under a Separate Business Unit (SBU) of the stock broking entity itself, in the
manner specified herewith.
3. The matters related to policy, eligibility criteria, risk management, investor
grievances, inspection, enforcement, claims etc. for stock brokers to transact on
NDS-OM would be specified under the regulatory framework issued by the
respective regulatory authority and all activities of the business unit of stock broker
facilitating trading on NDS-OM would be under the jurisdiction of that regulatory
authority.
4. In pursuance of the above regulatory jurisdiction, to demarcate the regulatory
obligations and to ring fence the activities of the stock brokers and its NDS-OM
activities, some of the key safeguards are being prescribed as under:
3.1 Stock brokers shall ensure that activities of the NDS-OM under a SBU
are segregated and ring-fenced from the securities market related
activities of the stock broker and arms-length relationship between
these activities are maintained;
Page 1 of 2
3.2 Such SBU shall be exclusively engaged in activities of transacting on
NDS-OM only;
3.3 Stock brokers shall prepare and maintain a separate account for the
SBU on arms-length basis;
3.4 The net worth of the SBU shall be kept segregated from the net worth
of the stock broker in the securities market. Net worth criteria for stock
broker shall be satisfied after excluding account of the SBU.
5. As the activities of the SBU shall be under the jurisdiction of another regulatory
authority, Grievance Redressal Mechanism and Investor Protection Fund (IPF) of
the stock exchanges and SCORES shall not be available for investors availing the
services of the SBU.
6. This circular is issued in exercise of powers conferred under Section 11(1) of
Chapter IV of the Securities and Exchange Board of India Act, 1992, read with
regulation 30 of the SEBI (Stock Brokers) Regulations 1992 to protect the interests
of investors in securities and to promote the development of, and to regulate the
securities markets.
7. This circular is available on SEBI website at www.sebi.gov.in under the category:
‘Legal → Circulars’.
Yours faithfully,
Aradhana Verma
General Manager
Tel. No.: 022-26449633
E-mail: aradhanad@sebi.gov.in
Page 2 of 2