FAQs on RFQ
Background:
‘Request for Quote’ (RFQ) is a trade execution platform, launched in 2020 as per the guidance from regulator. This platform is a direct participation model where all participants trade in their own account. With recent SEBI’s circular to permit participation through brokers from 01 Jan 2023, participants are now allowed to use the services of SEBI registered brokers of the NSE’s debt segment for executing deals on their behalf on RFQ Platform. The Platform uses RFQ protocol where an initiator may request other participants for a quote in corporate bonds, securitized debt instruments, municipal debt securities, Government securities, State development loans, Treasury bills, Commercial papers and Certificates of deposit or any other security as specified by Exchange from time to time. The RFQ platform shall provide users a range of options to seek a quote and to respond to a quote, while keeping an audit trail of all the interactions i.e. quoted yield, mutually agreed price, deal terms etc.
NSE would manage the RFQ platform, setting terms & conditions to operate on the RFQ platform and specifying various parameters for dealing with related interactions amongst the participants. The RFQ platform would be hosted in the existing NSE Corporate Bond Reporting and Integrated Clearing & Settlement (CBRICS) environment.
NSE ‘Request for Quote’ (RFQ) is a trade execution platform, launched in 2020 as per the guidance from the regulator. This platform was a direct participation model where all participants trade in their own account until recent SEBI’s circular to permit participation through brokers effective from 01 January 2023. Now participants are allowed to use the services of SEBI registered brokers of the NSE’s debt segment for executing deals on their behalf on RFQ Platform.
The key features of the NSE RFQ platform are as below:
- Web based platform – hosted on NSE CBRICS environment
- Quotes can be requested from specific group/entire market
- Identity can be kept anonymous/disclosed
- Limit setup at Entity, Counterparty, Portfolio, Issuer, Dealer, Single order level
- Yield & price calculation using cash flows from term sheet
- Automated CBRICS reporting and settlement
- SEBI stockbrokers registered under Debt Segment of NSE and registered as Online Bond Platform Providers
- Other SEBI stockbrokers registered under Debt Segment of NSE
Eligible Participants include all regulated entities, listed corporates, Institutional Investors as defined under SEBI ICDR Regulations, 2018. All India Financial Institutions and any other entity as allowed by Exchange from time to time will be eligible to participate on the RFQ platform. These participants shall have RFQ Platform access directly and/or through Eligible Trading Members.
The procedure for existing registered participants of CBRICS platform to operate on the NSE RFQ platform is as follows:
- Using existing CBRICS log-in credentials from Admin user, accept the ‘Terms and Conditions’ of the platform through click wrap undertaking.
The procedure for New Participant to operate on the NSE RFQ platform is as follows:
- Complete the existing registration procedure of CBRICS.
- Using CBRICS log-in credentials from Admin user, accept the ‘Terms and Conditions’ of the platform through click wrap undertaking.
Other eligible Participants include the ones who are not covered above, including retail investors shall have RFQ Platform access only through Eligible Trading Members and need to contact Eligible Trading Members for registration and further execution of transaction on RFQ Platform.
No. The participant, once satisfied with all deal parameters accepts the deal of their choice.
Yes. Participants will have to select access as ‘OTM’ to request quotes from all participants who have an access to RFQ Platform. In order to request quote from selected Participants, select access as ‘OTO’.
With effect from December 1, 2021, option to select deal type as ‘Brokered’ or ‘Direct’ is available for both OTM and OTO deals.
Yes, participants will have an option to keep identity anonymous or disclosed based on their choice.
No, negotiations are strictly one to one, other market participants cannot view them.
Participant while initiating a quote, will have to choose negotiating condition as ‘Fixed’. In this case, responder will have an option to ‘accept’ or ‘ignore’ the quote and no option to negotiate.
Size of RFQ should be in multiples of face value subject to a minimum of the face value.
Yes, for securities where cash flows are available.
No, all deals in corporate bonds shall be reported on CBRICS platform automatically. However, in case of CPs and CDs, participants have to follow the existing mechanism for reporting deals to F-TRAC platform.
The list of eligible securities for RFQ Platform would include corporate bonds, securitized debt instruments, municipal debt securities, Government securities, State development loans, Treasury bills, Commercial papers and Certificates of deposit or any other security as specified by Exchange from time to time.
As per SEBI’s circular (SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2022/154), online bond platform providers can execute deals on behalf of clients in only listed debt securities including corporate bonds, securitized debt instruments and municipal debt securities.
The deals may take place on all days in line with the CBRICS holiday calendar. The G-sec, T-bills and SDLs will be available only with settlement mode of T+1. The typical working hours are as under:
|
Market Hours |
Instruments |
Business / Working Days |
|---|---|---|
|
09:00 am to 05:00 pm for T+0, T+1 settlement |
CP / CD |
Monday to Friday |
|
09:00 am to 04:00 pm for T+0 settlement |
Bonds* |
Monday to Friday |
|
09:00 am to 05:00 pm for T+1 settlement |
Bonds, G-sec, SDL and T-bills |
Monday to Friday |
*Bonds (as defined under SEBI – Issue and Listing of Non-Convertible Securities Regulations)
Exchange may revise the market timings after providing prior notification to the market Participants.
The penal actions are driven by the trade cancellation/modification policy available on the RFQ Platform. The penal actions include but are not limited to non-participation on the RFQ platform for 15 days. Any penal actions for non-participation on the RFQ Platform will be jointly coordinated among all operating RFQ Platforms in the market.
Disclaimer:
“This document/FAQ has been drafted in order to ease Member’s/reader’s understanding of the subject matter. The information and/ or content (collectively ‘Information’) provided herein is general information only and NSE has issued detailed circulars to that effect from time to time. While reasonable care has been exercised to ensure that the information is adequate and reliable, no representation is made by NSE as to its accuracy or completeness and NSE, its affiliates and subsidiaries accept no liability of whatsoever nature for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this Information. The readers are expected to undertake their own diligence and are advised not to solely rely on this document. Any such reliance shall be at the reader’s own risk. Nothing stated herein shall bind NSE, in any manner whatsoever.”
Updated on: 08/05/2024
