NSE launches new version of RFQ platform for debt securities

To cater to the requirements of bond markets, the leading stock exchange NSE on Monday launched the new version of the Request for Quote (RFQ) platform.

The RFQ platform for debt securities was launched in February that allows market participants to transact in debt securities by requesting quotes from several participants, simultaneously.

Now, the bourse has launched the new version with several features which include voice-based negotiations in order to bring transparency to bond trading, as per the statement by the National Stock Exchange (NSE).

To reduce information asymmetry, the NSE RFQ platform provides information about bonds, term sheets, price information, market quotes, among others to all market players to trade in corporate bonds, securitized debt, municipal bonds, commercial paper, government securities (G-Sec), and treasury bills (T-bills).

“Pre-trade transparency and bringing bond markets to an electronic trading platform will propel Indian bond markets into a higher growth phase. The RFQ platform brings all major debt securities into a unified marketplace with information, data, and analytics to empower market participants and to deepen and widen participation," said Vikram Limaye, MD and CEO of NSE.

According to him, there is a need to attract a wider section of participants to the bond markets to make it robust and vibrant and the RFQ platform will help in achieving this objective.

An ISIN-level market watch is provided to the participants to view the summary of market activity in a given International Securities Identification Number (ISIN). It also provides market depth in the security along with information of best bid and best asks for the quotes initiated.

The platform offers high flexibility with features such as the ability to initiate quotes anonymously/with identity, sending quotes to select participants/ entire market, choosing deal parameters, quantity condition among others.

"If a bond has complex terms that require some time to confirm the price, then participants can choose to close the deal on yield and later confirm the price.

Alternatively, participants can choose to close deals on yield and price in one go," the exchange said.

From the risk management perspective, participants can set trading limits for counter-parties which are then monitored by the system.

The onboarding process has been made simple for existing CBRICS (Corporate Bond Reporting and Integrated Clearing and Settlement Platform) participants with an added feature of automated reporting of RFQ trades on the reporting platform to make the entire trade, reporting, and settlement process completely seamless.