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The Reserve Bank of India has decided to allow standalone primary dealers (SPDs) to offer all foreign exchange market-making facilities to users, as currently permitted to Category-I authorised dealers.
This is subject to adherence to the prudential regulations and other guidelines.
The central bank also decided to permit SPDs to take up trading and self-clearing membership with SEBI-approved stock exchanges/ clearing corporations for undertaking proprietary transactions in equity and equity derivatives market.
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Wider market presence would improve the ability of SPDs to provide support to the primary issuance and secondary market activities in government securities, which would continue to be the major focus of primary dealer activities, it added.
Hitherto, SPDs were permitted to undertake foreign currency business for limited purposes.
Report to CCIL
The central bank also said that with effect from January 1, 2023, all financial transactions involving the rupee undertaken globally by related entities of the SPD will have to be reported to CCIL’s Trade Repository before 12:00 noon of the business day following the date of transaction.
There are seven SPDs, including ICICI Securities Primary Dealership, PNB Gilts, SBI DFHI and STCI Primary Dealer.
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