NSE introduces trading of treasury bills, state development loans in capital market segment

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Published: July 29, 2020 4:15 AM

In line with equity trading, investors can now buy and sell T-Bills and SDLs through NSE trading members, said the bourse.

NSE said the dated government securities, which are already offered in the capital market segment, started trading from July 27.NSE said the dated government securities, which are already offered in the capital market segment, started trading from July 27.

The National Stock Exchange (NSE) on Tuesday announced the start of its trading in treasury bills (T-bills) and state development loans (SDLs) in its capital market segment. In line with equity trading, investors can now buy and sell T-Bills and SDLs through NSE trading members, said the bourse.

NSE said the dated government securities, which are already offered in the capital market segment, started trading from July 27. T-Bills and SDLS are issued by the central government and the state governments, respectively. Both are considered as eligible investments for banks to meet their statutory liquidity ratio (SLR) requirements. T-Bills are issued in three maturities — 91 days, 182 days, and 364 days — whereas SDLs are largely issued in the range of three to 35 years with majority of issuance taking place in the 10-year maturity segment.

Vikram Limaye, managing director and chief executive officer of NSE, said, “Availability of a secondary market for these securities would encourage participation in the primary markets. Now, all the major government securities, including G-sec, SDL and T-bills, are offered at NSE in both primary and secondary market platforms.” He stated that to date the G-sec market was dominated by institutional investors.

In 2018, NSE had introduced the NSE goBID online platform to allow retail investors to invest in fresh or re-issuances of G-secs (primary market) and T-bills through the non-competitive bidding mechanism. From November 2019, NSE added SDLs to this facility. “We believe that with the NSE goBID primary platform and the availability of these securities in the capital market segment for trading, coupled with NSE’s wide reach is likely to increase participation of retail investors in this asset class. This will aid in diversifying the investor base for the G-sec,” said Vikram Limaye.

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