This is in continuation to Exchange circular no. 20180419-34, dated April 19, 2018 regarding mock trading session for non-competitive bidding facility for Government securities.
Reserve Bank of India conducts primary auction of government securities which consist of Treasury Bills (T-Bill) & dated Government Securities (G-sec) issued on behalf of Government of India. The Auction process comprises namely ‘Competitive bidding’ and ‘Non-competitive bidding’ processes.
RBI has decided to allow retail investors to participate in the non-competitive bidding process of the auction with a view to diversify investor base and encourage wider participation of retail investors in G-sec market. This will enable medium and small investors to participate in the auction process without taking the price risk in auctions, i.e. without having to quote the yield or price in the bid along with amount.
Exchange is pleased to inform all trading members that it has received approval from the Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI) for acting as facilitator for non-competitive bidding (NCB) under RBI Auction in Government Securities (G-Sec) and Treasury Bills (T-Bills).
In view of this, the Exchange proposes to offer an online bidding platform “NCB-GSec” for collecting bids from members on behalf of their clients. This bidding platform is part of the iBBS (Internet-based Book Building System) - Exchange’s existing web-based online bidding platform for IPO, Offer for Sale (OFS), Offer to Buy (OTB) and Sovereign Gold Bond (SGB) issues. This platform shall be made available to members with effect from Tuesday, April 24, 2018 for placing bids for the Government securities being issued as part of Auction conducted by RBI from time-to-time.
Following Government Securities (G-sec) shall for available for non-competitive bidding (NCB) in the primary Auction -
1) Government Bonds or dated securities: Dated G-Secs are securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on half-yearly basis. It can be either be new issue or Re-issue.
2) Treasury bills: Treasury bills are zero coupon securities and pay no interest. They are issued at a discount and redeemed at the face value at maturity. T-Bills are issued in three tenors, namely, 91 days, 182 days and 364 days.
These securities are even tradable in secondary market on the Exchange. For more information on Government securities and the non-competitive bidding process, trading members may kindly refer to the RBI website as follows –
Frequently Asked Questions (FAQs) - https://www.rbi.org.in/Scripts/FAQView.aspx?Id=49
RBI circular - https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=11175&fn=2757&Mode=0
Issue Details
The securities available for non-competitive bidding under G-Sec and T-Bills auction, shall be notified by RBI through notification issued on weekly basis. Exchange shall start collecting bids from retail investors through their broker members before RBI auction date. Subsequent to RBI notification, Exchange shall communicate issue details along with bidding start date & end date via separate circular.
Online Bid Collection Process
Trading members can place bids on behalf of their clients, using the NCB-GSec module of the web-based iBBS system. Members can use their existing login credentials of iBBS system to place bids for the Government securities. For more details on the bidding process, members may kindly refer to the enclosed annexures as mentioned below –
Annexure 1 – Operational guideline for Non-Competitive bidding facility in the auction of Government of India Dated Securities and Treasury Bills.
Annexure 2 – User manual of “NCB- GSec” module of iBBS (Internet based Book Building System).
Annexure 3 – File formats
In case of any queries or clarifications, kindly contact the following teams at below mentioned numbers:-
For and on behalf of BSE Limited,
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Vivek Garg
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Tejash Somaiya
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General Manager
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Dy. General Manager
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Trading Development
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Trading Development
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April 23, 2018
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