INDIA: RBI Releases Draft Master Direction

Friday May 3 2024

On 29^th April 2024, the Reserve Bank of India (RBI) released the Draft Master Direction – Reserve Bank of India (Electronic Trading Platforms) Directions, 2024, poised to replace the existing Electronic Trading Platform (Reserve Bank) Directions, 2018 dated October 05, 2018. These Directions shall come into force with immediate effect.

These Directions are issued to the entities operating Electronic Trading Platforms (ETPs) on which transactions in eligible instruments, as defined under these Directions, are contracted.

An entity seeking authorisation as an ETP operator to commence or carry on ETP operation shall fulfil the following criteria:

General Criteria:

1. The entity shall be a company incorporated in India.
2. Shareholding by non-residents, if any, in the entity seeking authorisation as an ETP operator shall conform to all applicable laws and regulations, including the Foreign Exchange Management Act, 1999.
3. The entity seeking authorisation as an ETP operator, or its key managerial personnel shall have experience of at least three years in operating trading infrastructure in financial markets.

Financial Criteria

1. An entity seeking authorisation as an ETP operator under these Directions shall maintain a minimum net-worth of Rs.5 crore (Rupees five crore only) and shall continue to maintain the minimum net-worth prescribed herein at all times.

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