When Issued transactions can be undertaken in the government securities that are being reissued and on NDS-OM platform. The When Issued trading would commence on the date of announcement of an auction and ceases on the working day immediately preceding the date of issue of securities.
Eligibility of a government security to trade on When Issued basis will be specified in the auction notification commenting on this development in the debt markets, G Narayanan, managing director STCI said, Allowing when issued transaction can be viewed as one of the steps to improve the debt market conditions."
As per the guidelines put forth by RBI recently, all When Issued trades need to have a primary dealer (PD) as one of the counterparties (both counterparties can be PDs). The apex bank has permitted only the PDs to take a short position in the When Issued market. Non-PD entities would be permitted to sell the When Issued security only if they have a preceding purchase contract for equivalent or higher amount.