What changed
Previously, all government securities transactions required physical confirmation by back offices of counterparties. With the introduction of NDS-OM on August 1, 2005, trades matched on this anonymous screen-based order matching module are now exempt from this requirement because CCIL is the central counterparty for all deals.
What it means for you
Banks and other regulated entities can reduce operational burden for NDS-OM trades, as counterparty confirmation is no longer needed. However, all other government securities transactions not matched on NDS-OM must still follow the existing physical confirmation process.
What you must do
- Update internal procedures to skip counterparty confirmation for NDS-OM matched trades.
- Ensure back offices continue physical confirmation for all non-NDS-OM government securities transactions.
- Train staff on the distinction between NDS-OM and other trades for confirmation purposes.
Who it affects
All RBI regulated entities dealing in government securities, Back offices of banks and primary dealers, Clearing Corporation of India Ltd (CCIL)
Why is counterparty confirmation not needed for NDS-OM trades?
Because CCIL acts as the central counterparty for all NDS-OM matched deals, so each counterparty's exposure is only to CCIL, not to the matched entity.
Does this exemption apply to all government securities transactions?
No, it applies only to trades matched on NDS-OM. All other government securities transactions still require physical counterparty confirmation.