The legacy of Harshad Mehta, notorious for his market manipulation schemes, continues to cast a long shadow over India's financial regulatory landscape. The Reserve Bank of India (RBI) has adopted a cautious approach towards brokers, limiting their access to government securities (G-Secs) trading as a precautionary measure against potential market abuses [877e2d6d]. This distrust has inadvertently restricted retail investors' opportunities to participate in G-Sec trading, which is crucial for their investment portfolios.
Despite the RBI's stringent controls, the Securities and Exchange Board of India (SEBI) has proposed measures to enhance retail participation by allowing brokers access to the Negotiated Dealing System-Order Matching (NDS-OM) platform, which is currently underutilized for retail investors [877e2d6d]. However, the RBI has yet to act on these proposals, leaving retail investors struggling to navigate the G-Sec market effectively. The NDS-OM platform, while robust for institutional investors, remains largely inaccessible to retail participants due to the RBI's restrictive policies [877e2d6d].
There are growing calls for a transformation of the G-Sec market to allow brokers direct access, which could facilitate retail trading and enhance overall market liquidity. Advocates argue that such changes would not only empower retail investors but also contribute to a more vibrant and inclusive financial ecosystem in India [877e2d6d].