RBI Panel to Monitor Trading and Settlement Timings

Reserve Bank of India governor Sanjay Malhotra said today that the central bank will set a panel to review trading and settlement timings for markets governed by the RBI. The panel is expected to submit its report by April 30.

Malhotra said that a working group, which includes representation from various stakeholders will be established to carry out the review amid recent developments in financial markets.

RBI said, “Synchronized and complementary market and settlement timings across various financial market segments can facilitate efficient price discovery and optimize liquidity requirements.”

Over the last few years several developments have taken place, which includes heightened electrification of trading, increased participation of non-residents in domestic financial markets, availability of forex and certain interest rate derivative markets on a 24x5 basis, and availability of payment systems on a 24x7 basis, RBI said.

“They will also enable efficient pricing of derivatives that use bonds as underlying instruments. Draft directions in this regard were issued in December 2023. The final directions, taking into account public feedback, will be issued shortly,” the regulator said.