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
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.