RBI’s draft Master Directions on Electronic Trading Platforms
The Reserve Bank of India (RBI) has released a draft Master Direction for Electronic Trading Platforms (ETPs) titled ‘Reserve Bank of India (Electronic Trading Platforms) Directions, 2024’ which follow the RBI Governor Shaktikanta Das’s February monetary policy statement, where he highlighted the intention to review the regulatory framework for electronic trading platforms. The aim is to facilitate market makers' access to offshore ETPs offering permitted Indian Rupee (INR) products.
In October 2018, the RBI had introduced a framework for the authorisation of Electronic Trading Platforms to facilitate transactions in financial market instruments under its regulation. ETPs, distinct from recognised stock exchanges, are electronic systems enabling the trading of eligible instruments such as securities, money market instruments, foreign exchange instruments, derivatives, etc.
The Draft Directions said that an entity seeking authorisation as an ETP operator should maintain a minimum net-worth of Rs. 5 crore and continue to maintain the minimum net-worth prescribed all times. Also, the entity should be a company incorporated in India. Further, shareholding by non-residents, if any, in the entity seeking authorisation as an ETP operator should conform to all applicable laws and regulations, including the Foreign Exchange Management Act, 1999. The entity will also have to maintain robust technology infrastructure with a high degree of reliability, availability, scalability and security in respect of its systems, data and network, appropriate to support its operations and manage the associated risks.
