The Reserve Bank of India (RBI) on October 5, 2018, issued the Electronic Trading Platforms (Reserve Bank) Directions, 2018 (Directions) to put in place a framework for authorization of Electronic Trading Platforms (ETPs) for financial market instruments regulated by RBI.
An Electronic Trading Platform shall mean any electronic system, other than a recognised stock exchange, on which transactions are done through securities, money market instruments, foreign exchange instruments, derivatives, or other instruments of like nature (Eligible Instruments), as may be specified by the RBI from time to time.
The Directions specify that no entity shall operate as an ETP without obtaining prior authorisation of the RBI under the Directions. The existing ETPs operating on or before the commencement of the Directions are required to make an application seeking authorisation within a period of 6 (Six) months from the date of issuance of the Directions.
ETPs operated by banks for their customers (acting as users) on a bilateral basis are exempted from the provisions of the Directions provided that such platforms do not extend direct or indirect access to market makers in any market for Eligible Instruments, which would include, for the purpose of foreign exchange transactions, authorized dealers.
An entity which is an ETP operator shall be required to fulfil the Eligibility Criteria as mentioned under Section 5 of the Directions in order to obtain authorization from the RBI. This Eligibility Criteria also includes General Criteria, Financial Criteria, and Technological Criteria.
The authorisation granted to an entity to operate an ETP is not transferrable and the RBI may impose additional conditions if the ETP operator is found to violate the provisions of the Directions or any other rules or regulations or conditions of authorisation.
An ETP operator, under the Directions, shall be required to adhere to Information Technology (IT) and Information Security (IS) norms/guidelines, if any, prescribed by the RBI or any other regulator or public authority from time to time, as applicable to it. The operator shall also be required to adhere to the operating framework and also maintain transparency with the RBI.
The Directions also specify the procedure to be followed by RBI for granting authorisation to operate as an ETP and cancellation of authorisation.
Download Pdf
7A, 7th Floor, Tower C, Max House,
Okhla Industrial Area, Phase 3,
New Delhi – 110020
The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:
a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;
b) you are desirous of obtaining further information about us on your own accord and for your use;
c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;
d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and
e) in cases where the user has any legal issues, the user must seek independent legal advice.