Draft framework for electronic trading platforms has been issued by RBI.
‘Draft Master Direction – Reserve Bank of India (Electronic Trading Platforms) Directions, 2024’ is the name of the draft framework.
It specified that a company applying for authorization to operate as an ETP operator must keep a minimum net worth of Rs 5 crore.
Such an entity must always maintain the minimum net-worth that is specified.
Furthermore, the entity must be an Indian corporation.
If any non-residents own shares in such an entity, their ownership must abide by all relevant laws and rules, such as the Foreign Exchange Management Act of 1999.
The entity will also need to keep up a strong technological infrastructure.
A regulatory framework was put in place by the Reserve Bank in October 2018 to allow ETPs to execute transactions in financial instruments under its purview.
Since then, 13 ETPs operated by 5 operators have been authorised under the framework.
Any entity, whether resident or not, must register with the Reserve Bank or receive prior authorization before operating an ETP.
Any electronic system that contracts trades in eligible instruments but is not a recognised stock exchange is referred to as an ETP.
Securities, money market instruments, derivatives, foreign exchange instruments, and other similar items are all considered eligible instruments.
