What changed
RBI issued a master circular consolidating all existing guidelines/instructions/circulars for Primary Dealers up to June 30, 2010. It brings together regulations for standalone PDs and banks undertaking PD business departmentally, with separate sections for each. The circular also references a separate master circular on risk management and capital adequacy for standalone PDs.
What it means for you
This consolidation simplifies compliance for PDs by providing a single reference document. Banks doing PD business departmentally must follow bank-specific capital adequacy and risk management rules, while standalone PDs have their own separate guidelines. The circular reinforces RBI's oversight of the G-Sec market, aiming to strengthen market infrastructure and liquidity.
What you must do
- Review the master circular to ensure all current operational guidelines are being followed.
- For banks with PD departments, adhere to the additional guidelines in Section II, including separate books and accounts.
- Standalone PDs must comply with the separate risk management and capital adequacy master circular referenced.
- Submit all required statements and returns as per the formats listed in the annexes.
- Ensure compliance with the Prevention of Money Laundering Act, 2002 and corporate governance norms.
Who it affects
Standalone Primary Dealers, Banks authorized to undertake PD business departmentally, RBI's Department of Internal Debt Management (IDMD)
Does this master circular replace all previous PD guidelines?
Yes, it consolidates all guidelines/instructions/circulars issued up to June 30, 2010 into one document for ease of reference.
Are the capital adequacy rules for standalone PDs covered in this circular?
No, those are issued separately in Master Circular IDMD.PDRD.02/03.64.00/2010-11 dated July 1, 2010.
What additional requirements apply to banks doing PD business departmentally?
They must follow bank-specific capital adequacy and risk management norms, maintain separate books and accounts, and comply with Section II of this circular.