Description

BSE introduces mandatory OTM execution for brokered transactions and adds yield-price calculator to RFQ platform effective October 28, 2025.

Summary

BSE has implemented enhancements to the RFQ (Request for Quote) platform to improve operational efficiency as per SEBI directions, effective October 28, 2025. The key changes include mandatory One-to-Many (OTM) execution for brokered transactions and introduction of a yield-price calculator feature for debt securities.

Key Points

  • Manual broker selection option removed for One-to-Many (OTM) transactions
  • Brokered transactions must be executed by brokers on behalf of participants in OTM mode only
  • Other market participants can continue executing ‘Direct’ transactions in OTM mode
  • New yield-price calculator added for seamless conversion between clean/dirty price and yield
  • Changes supplement existing yield calculator functionality on the platform
  • Enhancements align with SEBI recommendations for RFQ platform operations

Regulatory Changes

SEBI has recommended removal of manual broker selection for OTM transactions. The Exchange has implemented this by mandating that all brokered transactions on the RFQ platform be executed exclusively in OTM mode by brokers acting on behalf of participants. This removes the previous flexibility of manual broker selection in OTM transactions.

Compliance Requirements

Stockbrokers:

  • Must execute all brokered client trades in OTM mode only on BSE RFQ platform
  • Cannot use manual broker selection for OTM transactions
  • Must familiarize themselves with the new yield-price calculator functionality

Other Market Participants:

  • Can continue executing ‘Direct’ transactions in OTM mode without changes
  • Should adopt the new yield-price calculator for price-yield conversions

Important Dates

  • Notice Date: October 17, 2025
  • Effective Date: October 28, 2025
  • Reference: Previous client trade functionality introduced via BSE Notice No. 20221229-40 dated December 29, 2022

Impact Assessment

Operational Impact: Stockbrokers will need to adjust their trading workflows to ensure all brokered transactions are executed exclusively in OTM mode. The removal of manual broker selection streamlines the process but reduces flexibility.

Market Impact: Limited direct market impact as this is primarily an operational enhancement. The mandatory OTM execution for brokered trades improves transparency and standardization in line with SEBI’s regulatory objectives.

Technology Impact: The new yield-price calculator enhances user experience by providing additional conversion capabilities between clean/dirty prices and yields, supplementing the existing yield calculator. Participants may need brief familiarization with the new tool.

Contact Information:

  • Mr. Milind Naik: 022 2272 5172
  • Mr. Harsh Adhiya: 022 2272 5347
  • Ms. Shamal Jadhav: 022 2272 5636
  • Ms. Harshada Mulaye: 022 2272 8629
  • Email: fixedIncome@bseindia.com

Impact Justification

Operational enhancement affecting stockbrokers and debt market participants on RFQ platform; mandates OTM execution for brokered trades per SEBI recommendations