RESERVE BANK OF INDIA
CENTRAL OFFICE
INTERNAL DEBT MANAGEMENT CELL
MUMBAI 400 001.
RBI /2004-05/ 66
IDMD.PDRS. 01 /10.02.01/2004-05
July 23, 2004
To All Primary Dealers in Government
Securities Market
Dear Sirs,
Transactions in Government Securities
Please refer to the instructions
contained in Bank’s circular no. RBI/2004/123
(IDMD.PDRS.05/10.02.01/ 2003-04) dated March 29, 2004 under which sale of
government securities already contracted for purchase was permitted provided
certain conditions stipulated therein were satisfied. To enable the implementation
of this relaxation, the settlement of government securities carried out through
CCIL was shifted to DVP-III mode.
2. We have since received enquiries
from market participants to clarify whether the revised regulations are applicable
to Gilt Account holders also, who hold their stock of government securities
in Gilt Accounts maintained with eligible custodians maintaining CSGL accounts
in the Public Debt Office of the Reserve Bank. It is clarified that, for the
present, the revised regulations contained in the above circular will not
be applicable to transactions of Gilt Account holders. Accordingly, Primary
Dealers who act as custodians (i.e., CSGL account holders) and offer the facility
of maintaining Gilt Accounts to their constituents should not permit settlement
of any sale transaction by their constituents unless the security sold is actually
held in the Gilt Account of the constituent. It is further clarified that the
relaxations permitted in the above circular are also not applicable when the
counterparty in the purchase contract is a Gilt Account holder with the custodian
itself. You may note to advise all your constituents holding Gilt Accounts with
you of this position.
3. Please acknowledge receipt.
Yours faithfully,
Sd/-
H.R.Khan
Chief General Manager-In-Charge
|