Debt Segment
N O T I C E
Subject: Launch of the BSE Wholesale Debt Segment and Guidelines on it’s working
Attention of the members of the Exchange is invited to the Exchange
Notices No. 74133/01 dated January 11, 2001 regarding the invitation of membership for trading
in the Debt Segment and Notice No. 78127/01 dated 20th February enclosing the copy of the
Contract Note Format to be used by the members for the transactions done by them in Central
government and State Government securities. The Exchange has now decided to commence commercial
trading in the Wholesale debt market segment with effect from June 15, 2001.
The various features of the trading mechanism in the Debt Segment are as described hereunder:
The criteria for members to register themselves for participating in the Debt Segment were
fixed as follows :
The member should have a net worth of minimum Rs. 3 crores and they are required to pay annual
approval/renewal charges of Rs. 25,000/- (Refer Notice No. 75429/01 dated 24th January, 2001)
The Exchange in the first phase will commence trading in the Central Government and the State
Government securities.
The Exchange will also continuously add on to the list of securities, new issues as and when
such issues are made by the Reserve bank of India.
The trade timings for the Continuous Session will be from 10 a.m to 5 p.m on Weekdays and from
10 a.m to 1.30 p.m on Saturdays. A detailed schedule of the logon session into the GILT system
are as given below:
Monday to Friday:
Log on Session - 9.00 a.m. - 10.00 a.m.
Continuous Session - 10.00 a.m. - 5.00 p.m
Log off and Report Downloading session - 5.00 p.m. - 6.00 p.m
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Saturdays:
Log on Session - 9.00 a.m. - 10.00 a.m.
Continuous Session - 10.00 a.m. - 1.30 p.m
Log off and Report Downloading session - 1.30 p.m. - 2.30 p.m
The participating members are required to issue contract notes to the clients at the end of the
trading day in the prescribed format. (Notice No. 78127/01 dated 20th February, 2001). A format
of the contract note is enclosed for your ease of reference - Annexure 1)
The GILT software developed for the Trading will have the following features with respect to
placing of orders and trade execution :
The system will provide an order entry window through which the members can enter the orders in
the system. The orders entered can be modified or deleted by the users until a trade takes place
by grabbing of the same order by another member.
The Order Entry Window will have order type, scrip type, settlement mode, face value and price.
The members should ensure that entries with respect to these attributes are duly filled in
while entering an order.
The present facilities permit the members to enter orders of value of less than Rs. 100 crores
in one order. The prices that are entered into the system are not subjected to any circuit
filter mechanism and hence the members are requested to exercise utmost care while entering the
orders in the system.
The Gilt will provide a touchline window, which will display the best available order on bid
and offer side based on the rates at which the orders are entered into the system.
The following are the trade execution facilities provided in the Gilt system :
Order Entry: The order entry window in the GILT system will allow the members to enter any
order for display in the order-grabbing window. The order would be matched when it is grabbed
by an opposite party from the order grab window.
Order Grab: The order grab facility will allow the members to view the orders that have already
been entered in the system by the members and to grab a matching buy or sell order.
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Negotiated Deals: The Negotiated Deals are generally executed through the telephone or other
forms of communication and reported to the Exchange for confirmation.
Cross Deals: The Gilt system provides for reporting of Cross Deals. Cross Deals are the trades
wherein both the clients are of the same member. While entering Cross Deals, the member has to
enter the Client IDs of both the buyer and the seller along with other fields. Cross Deals
once entered into the system cannot be deleted or modified.
The system provides a facility for entering orders on behalf of institutional clients indicated
by “FI” and for on - account transactions indicated by “OWN.”
A list of institutions who are the major participants in the trading of Central and State
Government Securities is made available in the Gilt System to assist the members in tracking
the institutional clients and make the necessary entries.
The GILT system will provide information regarding unsettled trades, which are the trades that
are executed but not settled. The member needs to enter the necessary details which are the SGL
A/c No. and SGL Form No. in case of settlement by the SGL mode and Demat Account No. and Bank
Name. in case of settlement by demat.
The system will not provide for the entry of Repo transactions, in the first phase.
The primary responsibility of settling the trades concluded rests directly with the
participants. The trades are settled in gross i.e. on a trade to trade basis directly between
the constituents/ participants to the trade.
The members are required to specify upfront the settlement date ranging from T+0 to T+5 at the
time of entering the order. It is mandatory for trades to be settled on the pre-decided
settlement date as entered into the GILT system at the time of entering the trade.
The member must report to the Clearing and Settlement Department as regards the following :
trades which both the constituents subsequently decide to cancel with mutual consent
(cancelled trades) and
trades that do not get settled on the pre-decided date(failed trades).
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In the above mentioned cases, the member must collect letters from the participating clients
explaining the reason for such failures of trades/ cancellation of the trades and in turn
submit copies of these letters to the Clearing and Settlement Department of the Exchange.
The transaction charges that would be applicable for the trades done on the GILT System are as
under :
Rs. 50/- per trade entered on the ‘GILT’ System or
1 basis point of the total value of transaction i.e. 0.01% of the value of the transaction,
whichever is lower.
The transaction charges levied would be also subject to a maximum limit of Rs. 1,00,000/- for
all the trades done by a member during the year. The Exchange reserves the right to revise
these charges from time to time.
The stamp duty applicable for the contracts issued in respect of trades done in the Central
and State Government Securities will be as follows :
One basis point of the total value of transaction i.e. 0.01% of the value of transaction or
Rs. 1000/-, whichever is lower.
Trading in the Central and State Govt. Securities are not permitted for a 3 day shut down
period including and prior to the date of payment of interest or the date of maturity of
the respective securities.
Presently, the software for the GILT system has no provision to disallow the trades in the
shutdown period. Members are therefore requested to exercise utmost care and precaution while
entering the trades in the GILT system.
In case of queries, if any, the members may kindly contact:
Mr.P.K.Ramesh - Extn: 8012
Mr.Rajesh Varma - Extn: 8701
Ms.Shilpa S. - Extn: 8417
R.Vaidyanath
General Manager
Business Development and Debt Segment
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