NSE introduces trading of T-bills, SDLs in capital market segment

NSE introduced trading in treasury bills (T-bills) and state development loans (SDLs) in its capital market segment

Leading stock exchange NSE on Tuesday introduced trading in treasury bills (T-bills) and state development loans (SDLs) in its capital market segment.

In line with equity trading, investors can now buy and sell T-bills and SDLs through NSE trading members, the National Stock Exchange (NSE) said in a statement.

It said dated government securities (G-secs) are already offered in the capital market segment.

T-bills and SDLs are both part of the government securities group and have been widely accepted as a safer investment choice. T-bills are issued by the central government whereas SDLs are issued by state governments.

Both are reckoned as eligible investments for banks for the purpose of meeting SLR (Statutory Liquidity Ratio) requirements.

T-bills are issued in three maturities -- 91 days, 182 days and 364 days, whereas SDLs are largely issued in the range of 3 to 35 years, with the majority of issuances taking place in the 10-year maturity segment.

Earlier in 2018, NSE had introduced an online platform to allow retail investors to invest in fresh or re-issuances (primary market) of G-secs and T-bills through the non-competitive bidding mechanism.

The exchange also added SDLs to this facility in November 2019.

In addition to G-secs, now T-bills and SDLs are also offered in the capital market segment, which provides an alternate exit route to these investors who have subscribed through the primary market.

"Availability of a secondary market for these securities would encourage participation in the primary markets. Now all the major government securities including G-sec, SDL and T-bills are offered at NSE in both primary and secondary market platforms,"NSE Managing Director and CEO Vikram Limaye, said.

To date, the government securities market is dominated by institutional investors, he added.

According to him, availability of these securities in the capital market segment for trading, coupled with NSE's wide reach, is likely to increase participation of retail investors in this asset class. This will aid in diversifying the investor base for the government securities.