RBI mandates FIMMDA Code of Conduct for NDS-OM and OTC trades
Current · Source: Reserve Bank of India · RBI/2012-13/316 · issued 06 Dec 2012 · ~1 min read
Quick answerRBI has directed all SGL/CSGL account holders to follow the FIMMDA Code of Conduct when trading on NDS-OM and OTC markets, as per circular dated December 6, 2012, to ensure integrity in the government securities market.
The rule, in the simplest words
All SGL/CSGL account holders (people who hold government securities in a bank account) must follow the FIMMDA Code of Conduct when trading on NDS-OM (Negotiated Dealing System‑Order Matching) and OTC (Over‑The‑Counter) markets.
The code was created by FIMMDA (Financial Institutions and Markets Management Development Authority) together with RBI and market participants to keep the government securities market fair and orderly.
If a bank or trader does not follow the code, RBI can take action under the Government Securities Act, 2006, which may include penalties.
Banks must train all trading desk staff, update internal policies, and monitor trades to ensure everyone follows the code.
This rule applies to every bank and primary dealer (big banks that trade directly with the government) that trades government securities on NDS‑OM and OTC markets.
How it plays out — a real example
Rohan, a senior trader at a Mumbai bank, uses the NDS‑OM to buy government bonds for a client. He checks the FIMMDA Code of Conduct on the bank’s intranet, follows the guidelines for fair pricing and disclosure, and logs the trade. By doing so, he keeps the market orderly and avoids any regulatory trouble.
What changed
RBI issued a circular on December 6, 2012, directing all SGL/CSGL account holders to adhere to the FIMMDA Code of Conduct for trades executed on the Negotiated Dealing System-Order Matching (NDS-OM) and in the Over-The-Counter (OTC) market. The code, developed by FIMMDA in coordination with RBI and market participants, is to be followed in the interest of maintaining integrity and orderly conditions in the government securities market, issued under section 29(2) of the Government Securities Act, 2006.
What it means for you
Banks and other SGL/CSGL account holders must now comply with a standardized code of conduct for government securities trading, which aims to maintain orderly market conditions and prevent misconduct. Non-compliance could invite regulatory action under the Government Securities Act, 2006. This move reinforces RBI's oversight of the government securities market and promotes transparency.
What you must do
Access and review the FIMMDA Code of Conduct from the FIMMDA website (www.fimmda.org).
Ensure all trading desks and relevant staff are trained on and adhere to the code for NDS-OM and OTC trades.
Update internal policies and compliance frameworks to align with the mandatory code.
Monitor trades to ensure compliance and report any deviations to the appropriate authorities.
Who it affects
All SGL/CSGL account holders, Banks and primary dealers trading in government securities, Market participants using NDS-OM and OTC markets
❓ Common questions
Is compliance with this code optional?
No, RBI has directed all SGL/CSGL account holders to adhere to the code, as per the circular dated December 6, 2012, issued under section 29(2) of the Government Securities Act, 2006.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/316
IDMD.DOD.No.06/10.25.66/2012-13
December 06, 2012
To
All SGL/CSGL Account holders,
Dear Sir/Madam,
FIMMDA Code of Conduct for usage of Negotiated Dealing System-Order Matching (NDS-OM) and Over-The-Counter (OTC) Market
FIMMDA in co-ordination with RBI and market participants has developed and implemented a Code of Conduct for users of NDS-OM and other systems. The same can be accessed at FIMMDA website ( www.fimmda.org ).
2. It has now been decided that in the interest of maintaining integrity and orderly conditions in the government securities market, all SGL/CSGL account holders should adhere to the FIMMDA code of conduct while executing trades on NDS-OM and in the OTC market. These guidelines are issued in exercise of the powers conferred on the Reserve Bank of India under section 29(2) of the Government Securities Act, 2006.
Yours faithfully,
(K. K. Vohra)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/316 · issued 06 Dec 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All SGL/CSGL account holders, Banks and primary dealers trading in government securities, Market participants using NDS-OM and OTC markets), your first concrete step on “RBI mandates FIMMDA Code of Conduct for NDS-OM and OTC trades” is: “Access and review the FIMMDA Code of Conduct from the FIMMDA website (www.fimmda.org).” (RBI issued this 06 Dec 2012).
Circular: RBI/2012-13/316 -- RBI mandates FIMMDA Code of Conduct for NDS-OM and OTC trades
Issued: 06 Dec 2012
Action required: Access and review the FIMMDA Code of Conduct from the FIMMDA website (www.fimmda.org).
Action required: Ensure all trading desks and relevant staff are trained on and adhere to the code for NDS-OM and OTC trades.
Action required: Update internal policies and compliance frameworks to align with the mandatory code.
Action required: Monitor trades to ensure compliance and report any deviations to the appropriate authorities.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7734&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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