Description

BSE implements operational improvements to the RFQ platform including mandatory broker execution for OTM brokered transactions and a new yield-price calculator, effective October 28, 2025.

Summary

BSE has implemented enhancements to the Request for Quote (RFQ) platform in the debt segment to improve operational efficiency as per SEBI directions. The changes include removal of manual broker selection for One-to-Many (OTM) brokered transactions and introduction of a yield-price calculator. These enhancements will be effective from October 28, 2025.

Key Points

  • Manual selection of broker option for One-to-Many (OTM) transactions has been removed
  • Brokered transactions must now be executed by brokers on behalf of participants in OTM mode only on the RFQ Platform
  • Other market participants can continue to execute ‘Direct’ transactions in OTM mode
  • New yield-price calculator feature added for seamless conversion between clean/dirty price and yield
  • This calculator is in addition to the existing yield calculator on the platform
  • Changes effective from October 28, 2025

Regulatory Changes

As per SEBI recommendations, the Exchange has modified the execution mechanism for brokered transactions:

  • Previously, client trades on BSE RFQ platform were allowed with manual broker selection (introduced via notice 20221229-40 dated December 29, 2022)
  • Now, brokered transactions are required to be executed exclusively through brokers on behalf of participants in OTM mode
  • This change aligns with SEBI’s directions for improving operational efficiency

Compliance Requirements

For Stockbrokers:

  • Must execute all brokered transactions on behalf of participants in OTM mode only
  • Cannot use manual broker selection option for OTM transactions
  • Need to adapt their operational workflows to the new execution mechanism

For Other Market Participants:

  • Can continue to execute ‘Direct’ transactions in OTM mode without changes
  • May utilize the new yield-price calculator for pricing and yield calculations

Important Dates

  • Notice Date: October 17, 2025
  • Effective Date: October 28, 2025 - All enhancements become operational

Impact Assessment

Operational Impact:

  • Moderate impact on brokers who execute OTM brokered transactions - will need to adjust their execution processes
  • Removal of manual broker selection streamlines the transaction workflow and reduces potential errors
  • Enhanced transparency in brokered transaction execution

Market Efficiency:

  • Yield-price calculator improves ease of use and reduces calculation errors
  • Standardization of brokered transaction execution in OTM mode improves market integrity
  • Aligns platform functionality with regulatory expectations

Participant Impact:

  • Brokers need to update their internal procedures and train staff on the new execution requirements
  • Direct market participants experience minimal disruption
  • Improved tools (yield-price calculator) enhance user experience for all participants

Contact Information:

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

Impact Justification

Affects operational workflow for debt market participants using RFQ platform, particularly brokers executing OTM transactions; adds convenience features but requires process adjustments