On Tuesday, NSE incorporated trading in treasury bills (T-bills) and state development loans (SDLs) in its capital market segment.
The National Stock Exchange (NSE) announced in a statement that in line with equity trading, investors can now by and sell T-bills and SDLs through NSE trading members. G-secs or dated government securities are already offered in the capital market segment.
Previously in 2018, NSE had introduced an online platform to allow retail investors to invest in fresh or re-issuances (primary market) of G-secs and T-bills through the non-competitive bidding mechanism. The exchange also added SDLs to this facility in November 2019.
T-bills and SDLs are both parts of the government securities group and have been widely accepted as a safer investment choice. T-bills are issued by the central government whereas SDLs are issued by state governments. Both are reckoned as eligible investments for banks for the purpose of meeting SLR (Statutory Liquidity Ratio) requirements.
T-bills are issued in three maturities 91 days, 182 days and 364 days, whereas SDLs are largely issued in the range of 3 to 35 years, with the majority of issuances taking place in the 10-year maturity segment. Besides G-secs, T-bills and SDLs are offered in the capital market as well, providing an alternate exit route to these investors who have subscribed through the primary market.
NSE Managing Director and CEO Vikram Limaye 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. The government securities market is dominated by institutional workers to date.”
The capital market segment for trading will have available securities, according to him. Coupled with NSE’s wide reach, it is likely to increase the participation of retail investors in this asset class. This will aid in diversifying the investor base for the government authorities.
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