Leading bourse BSE has received ‘no objection’ from markets regulator Sebi to act as a facilitator in non-competitive bidding in auction of government securities through exchange mechanism. The facility would give retail investors an avenue to participate in the government securities market, the BSE said in a statement. Under the non-competitive bidding (NCB) scheme, eligible investors apply for a certain amount of securities in an auction without mentioning price or yield. The scheme was introduced by the Reserve Bank of India (RBI) in January 2002. NCB is open to individuals, HUFs, regional rural banks, co-operative banks, firms, companies, corporate bodies, institutions, provident funds, and trusts. “However, NCB has failed to attract retail investors and and the penetration of government securities continues to be low,” the exchange said. In January, BSE had received in-principle approval from the RBI to act as a facilitator to retail investors, including individuals, to participate in non-competitive bidding facility in the auction of government securities and treasury bills.
Earlier, Finance Minister Arun Jaitley had made an announcement in his Budget speech last year for greater retail participation in government securities in primary as well as secondary markets through stock exchanges.