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Insurers welcome e-trading of gilts
Our Bureau
Mumbai
,
Oct 25
THE Reserve Bank of India has decided to extend electronic trading in gilts - the screen-based anonymous order matching - to insurance companies.
By the end of September 2005, 117 members were active on this module. NDS-OM volumes covered around two-thirds of the total outright transactions in dated government securities in the secondary markets.
The insurance companies have welcomed the move. The Managing Director of Life Insurance Corporation (LIC), Mr D.K. Mehrotra, said that allowing insurance companies to participate in the debt market would bring about ease in transactions. It is especially useful since confidentiality in maintained and our quotes are kept anonymous.
According to sources, insurance companies including LIC had sought the move towards screen-based order matching since it provides for less price manipulation, minimum impact cost with quotes being availed of on a real time basis.
Mr Puneet Nanda, CIO, ICICI Prudential Life insurance said, "Our company has a large asset-base of over Rs 5,000 crore with substantial investment in G-secs and a move like this would bring it to par with other institutional players."
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