BSE to provide non-competitive bidding facility in SDLs to retail investors

Leading bourse BSE has said it will start non-competitive bidding facility in state development loans (SDLs) which will enable the retail investors to participate in these auctions through an online registration process.

SDLs are dated securities issued by state governments through normal bidding process similar to the auctions conducted for such securities issued by the central government, where interest is received semi-annually, and principal is repaid at maturity.

In a statement, BSE has announced the "introduction of non-competitive bidding facility in state development loans. Retail investors can now participate in these auctions through an easy online registration process".

The Reserve Bank of India (RBI) in its various measures to encourage retail participation has extended access to primary auctions to SDLs.

The RBI conducts auctions for such securities on a weekly basis where 10 per cent of the notified amount is allotted for eligible investors under the scheme for non-competitive bidding (NCB).

"We are happy that from now onwards BSE can act as a facilitator for non-competitive bidding under RBI's auction to aggregate the bids from retail investors and submit a single bid to RBI. This facility will go a long way in strengthening the capital markets," BSE MD and CEO Ashishkumar Chauhan said.

The exchange's non-competitive bidding facility will be in addition to the government securities and treasury bills which are currently being offered through its platforms -- BSE Direct App and bsedirect.com website.

Last week, rival bourse National Stock Exchange (NSE) had introduced the same facility.