other market participants in securities

other market participants in securities

Second, greater responsibility cast on PDS may need to be compensated with appropriate incentives and one of the proposals is to extend exclusivity to tender, which is a typical feature in most countries with the PD system. However, another view is that this may disadvantage other market participants in securities that were directly involved in auctions.
Third, PDS also is required to play the role of market makers by always offering a two-way quotes, and thus the transfer of liquidity. However, it is found that the absence of short sales restrictions on market-making role of the PDS. The question for consideration is whether short selling, with appropriate safeguards would be necessary for the PDS to play the role of market makers.
Fourth, a number of challenges have emerged in the monetary and debt management: To meet the new challenges, Reserve Bank is taking steps to fine-tune the open market operations. This will be greater accuracy in forecasting market liquidity over the short to medium term. Operationally, open market purchases and sales may need to be taken, necessitating a review of processes and technical infrastructure in accordance with market developments.
Other recommendations of the Group to further develop the efficiency and liquidity of the secondary market for government securities include (i) active consolidation of securities, (ii) introduction of "when issued" market on a phased manner, and (iv) Securities securities borrowing window to the PDS.
As per the announcement in the Union Budget 2005-06, the Law Amending the Law on RBI, 1934 providing, among other things, the legality of OTC derivatives was introduced in the Assembly. Similarly, the Government Securities Bill seeks to expand the market for government securities by facilitating retailing interests, while also providing orderly secondary market. Some of the significant improvements expected in the management of public debt on account of this Bill are: (i) stripping and reconstitution of government securities on the secondary market, provide improved liquidity on the one side and allow better allocation of risk in the appropriate class of investors, on the other hand, (ii) provision for hypothecation, pledge and lien on the creation of government securities, etc.
Let me now turn to the money market.