With a view to regulate and develop the Government securities market of the country, the Reserve Bank of India has issued a comprehensive review of the existing guidelines on ‘When Issued’ market to all the persons eligible to participate or transact business in Government securities in India.

These Directions are called the “When Issued Transactions (Reserve Bank) Directions, 2018” and will supersede all other instructions/ guidelines issued on the subject. These Directions came into force with effect from July 24, 2018.  These Directions will be applicable to ‘When Issued’ transactions in Central Government securities.


Based on these directions, ‘When Issued’ transactions will apply to these securities –

  • Both new and reissued Government securities issued by the Central Government.
  • Eligibility of an issue for ‘When Issue’ trades would be indicated in the respective specific auction notification.


As per these directions, the participants eligible to undertake both net long and short position in ‘When Issued’ market for both new and reissued securities are –

  • All eligible entities participating in the primary auction of central government securities (G-secs);
  • Resident individuals, Hindu undivided families (HUF), nonresident Indians (NRI) and overseas citizens of India (OCI) are eligible to undertake a long position only in the ‘When Issued’ securities;
  • Entities other than scheduled commercial banks and primary dealers (PDs), shall close their short positions, if any, by the close of trading on the date of auction of the underlying central government security.

Operational Aspects

Given these direction, transactions in a security on a ‘When Issued’ basis shall be undertaken based on the following measures:

  • ‘When Issued’ transactions would commence after the issue of a security is notified by the Central Government and it would cease at the close of trading on the date of the auction.
  • All ‘When Issued’ transactions for all trade dates shall be contracted for settlement on the date of issue.
  • In the case of reissued securities, ‘When Issued’ securities shall form a part of the settlement of the secondary market transaction on the date of issue. At the time of settlement of secondary market transactions on the date of issue, trades in the ‘When Issued’ security will be netted off with trades in the existing security.
  • In case an entity is unable to deliver securities sold on a ‘When Issued’ basis to the buyer on the date of issue, the transaction will be settled as per the default settlement mechanism of Clearing Corporation of India Limited (CCIL).
  • Members of the Securities Settlement Segment of CCIL (hereafter referred to as ‘members’) shall be responsible for settlements and reporting of trades of their constituent entities, viz., entities maintaining gilt accounts or demat accounts. Accordingly, eligible constituent entities shall undertake ‘When Issued’ transactions to the extent permitted by the members through whom they settle their securities transactions, within the limits prescribed.
  • At the cessation of ‘When Issued’ trading on the date of the auction, no entity shall run a short ‘net position’ in a security in excess of the limits prescribed for short sale positions in Central Government securities.
  • In the event of cancellation of the auction for whatever reason, all ‘When Issued’ trades will be deemed null and void ab-initio on grounds of force-majeure.


The open position limits in the ‘When Issued’ market will be as follows:

Position Limits
Categories Long Short
PDs and scheduled commercial banks Not exceeding 25 per cent of the notified amount in the auction Not exceeding 25 per cent of the notified amount in the auction
Other eligible entities Not exceeding 25 per cent of the notified amount in the auction Not exceeding 10 per cent of the notified  amount in the auction (Individuals, HUFs, NRIs and OCIs are not allowed to take short positions in the ‘When Issued’ market)

The earlier requirement that aggregate net short positions (sum of all net short positions across all entities) in a new security capped at 90% of the notified amount has now been dispensed with. Aggregate net short positions will not be subject to any limits.

Trading venues

‘When Issued’ transactions shall be undertaken only on the Negotiated Dealing System-Order Matching (NDS-OM) platform. However, an existing position in a ‘When Issued’ security may be closed either on the NDS-OM platform or outside the NDS-OM platform, that is, through Over-the- Counter (OTC) market.


All OTC ‘When Issued’ transactions shall be reported to NDS-OM within 15 minutes of the trade.

The Statement on Developmental and Regulatory Policies, announced earlier by the Reserve Bank on June 6, 2018 had proposed to liberalise the eligible participant base and relax the entity-wise limits for transactions in the “When Issued” (WI) market in Central Government Securities.

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