On Feb. 14, 2025, IND NSE issued a circular to extend the submission deadline of confirming the entity type of RFQ participants from Feb. 15, 2025 to Mar. 7, 2025.
On Oct. 19, IND SEBI updated on changes to platform permissions.
IND SEBI allowed stock brokers registered under the debt segment of stock exchanges to place/seek bids on Request for Quote (RFQ) platform on behalf of client(s).
Follows IND BSE launch of RFQ platform for debt securities, see rule #71326, and IND SEBI specified percentage of corporate bond trades through RFQ, see #123749.
Key Points
RFQ is a platform that enables multilateral negotiations on a centralized online trading platform with straight through processing of clearing, settlement to complete trades.
Decided after representations from participants to permit stock brokers to place bids on behalf of clients to facilitate wider market participation in corporate bond market.
Stock exchanges are directed to put in place the necessary infrastructure for access and use of the platform by the participants including stock brokers.
They must also issue circular(s) covering the modalities for operational aspects and bring the provisions of this circular to the notice of SEBI registered stock brokers.
Effectiveness
Effective Jan. 1, 2023.
Oct. 20, 2022 Press Release
On Oct. 20, 2022, IND SEBI issued a press release on allowing brokers to place bids.
Jan. 2023 Mode of Settlement
On Jan. 9, 2023, IND SEBI issued a circular containing clarification and directions regarding mode of settlement for trades executed on request for quote (RFQ) platform.
Clarified that, in addition to the existing payment mechanisms, payment mechanisms provided by banks or payment aggregators authorized by IND RBI, may be used.
Specifically, for the settlement of trades that are executed on the RFQ platform.
Directed stock exchanges and clearing firms to put in place necessary infrastructure.
Also, directed them to: bring provisions of this circular to the notice of the stock brokers, also disseminate same on their websites; and make necessary amendments.
That is, amendments to relevant bye-laws, rules, regulations for the implementation of these directions to achieve uniformity in approach and communicate to IND SEBI.
Also, this circular shall come into force with immediate effect on/from Jan. 9, 2023.
Feb. 2023 Alternative Investment Funds
On Feb. 1, 2023, IND SEBI issued a circular regarding alternative investment fund's (AIFs) transactions in corporate bonds through the request for quote (RFQ) platform.
Stipulated AIFs shall undertake at least 10% of their total secondary market trades in corporate bonds by value in a month by placing/seeking quotes on the RFQ platform.
In addition, IND SEBI clarified that all corporate bond transactions wherein AIF(s) is/are on both sides of trade shall be executed via RFQ platform in one-to-one mode.
Any corporate bond transactions by an AIF in one-to-many mode which get executed with another AIF, shall be counted in one-to-many mode, and not in one-to-one mode.
Stated the aforesaid requirement shall come into force with effect from Apr. 1, 2023.
Feb. 2024 Funds Settlement Mechanism
On Feb. 19, 2024, IND ICCL announced it has implemented several funds settlement mechanism and on-boarded Phi Commerce Private Limited for payment services.
The fund settlement mechanisms it has provided include for the settlement of RFQ and over the counter (OTC) include a real time gross settlement (RTGS) channel.
As well as a national electronic fund transfer (NEFT) channel and enabled a UPI mechanism for RFQ deals settlement which is operational from Mar. 1, 2024.
Jan. 2025 IND NSE Confirmation of Entity Type
On Jan. 13, 2025, IND NSE said RFQ participants are required to confirm their entity type as per the process defined in annexure, deadline for submission is Feb. 15, 2025.
Participants must complete this process to ensure continued access to RFQ platform.
Document dated Jan. 13, 2025, received from IND NSE Jan. 14, summarized Jan. 16.
Feb. 2025 IND NSE Submission Deadline Extension
On Feb. 14, 2025, IND NSE issued a circular to extend the submission deadline of confirming the entity type of RFQ participants from Feb. 15, 2025 to Mar. 7, 2025.
Regulators
IND ICCL; IND NSE; IND SEBI
Entity Types
B/D; Corp; Exch; Inv Co
Reference
Cir 13/2025, NSE/COMP/66673, 2/14/2025; Cir 03/2025, NSE/COMP/66103, 1/13/2025; Nt 20240219-45, 2/19/2024; Cir SEBI/HO/AFD/PoD/P/CIR/2023/017, 2/1/2023; Cir SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/9, 1/9/2022; PR 33/2022, 10/20/2022; Cir SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/142, 10/19/2022; Citation: Securities and Exchange Board of India act 1992;
