TRADING IN GOVERNMENT SECURITIES ON THE STOCK EXCHANGES

PUBLIC COMMENTS ON THE DRAFT SCHEME INVITED - PRESS NOTE

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In order to further develop a transparent and active debt market in general and Government securities market in particular, Government announced several measures in the Budget for 2001-02 which, inter-alia, included trading of government securities through order driven screen based system. A scheme for implementing this policy reform has been prepared in mutual consultation with the Ministry of Finance & Company Affairs, Securities and Exchange Board of India and the Reserve Bank of India.

The scheme envisages that trading in Government securities will be done in the same manner in which trading takes place in equities through a nationwide, anonymous, order driven, screen based trading system of the stock exchanges. This facility will be in addition to the present system of dealing in government securities through the Negotiated Dealing System (NDS) of the RBI.

The scheme is being placed simultaneously on the websites of the Ministry of Finance and Company Affairs (www.finmin.nic.in), the RBI (www.rbi.org.in) and the SEBI (www.sebi.gov.in) for comments from the public. Comments may be sent late! st by January 9, 2003 to ssaksena@finance.nic.in; or to pkb@sebi.gov.in; or to cgmidmc@rbi.org.in These comments will be taken into account before taking a final decision in the matter.