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The Tax Publishers Banking--Notification No. IDMD.CDD. S788/11.22.001/2021-22, dtd. 22-9-2021 [Advt.-III/4/Exty./292/2021-22] Constituents' Subsidiary General Ledger Account: Eligibility Criteria and Operational Guidelines In exercise of the powers conferred by Section 4 of the Government Securities Act, 2006 (38 of 2006) (the Act), the Reserve Bank of India (the Bank) hereby specifies the conditions applicable henceforth for opening and maintenance of a Constituents' Subsidiary General Ledger (CSGL) account, as also the records to be maintained and procedures to be adopted by the CSGL account holders for safeguarding the interests of their constituents. I. A Constituent Subsidiary General Ledger (CSGL) shall mean a subsidiary general ledger (SGL) account opened and maintained with the Bank by an agent on behalf of the constituents of such agent; II. The Bank may open and maintain CSGL accounts for conduct of its operations and for such purposes the Bank may deem necessary. III. Eligible Entities The entities mentioned below are eligible to open and maintain a CSGL account with the Bank on behalf of their constituents-also known as 'Gilt Account Holders' (GAHs): i. Licensed banks with minimum net worth of Rs.100 cr. ii. Primary Dealers authorised by Reserve Bank of India iii. Depositories as defined under Depositories Act 1996 iv. Clearing Corporation of India Limited or other Clearing Corporations as may be approved by the Bank v. National Bank for Agriculture and Rural Development (NABARD) vi. Stock Holding Corporation of India Ltd (SHCIL) vii. Such other entities as may be allowed by the Bank from time to time. IV. Operational Guidelines to be complied with by the CSGL Account Holders i. An eligible entity will, in normal circumstances, be allowed to open and maintain only one CSGL account. In certain cases, the Bank may allow an entity to open additional CSGL accounts. A constituent is not permitted to open and maintain an SGL account with the Bank (except when the SGL account has been opened after specific approval of the Bank or for regulatory/margin purposes). ii. The CSGL account holders shall ensure that the constituents for whom the gilt accounts are opened/maintained satisfy the eligibility conditions for holding Government securities in terms of the General Loan Notifications as also the specific Loan Notifications issued by the Government. iii. The CSGL account holders, who are regulated by the Bank, shall follow guidelines on 'Know Your Customer' (KYC) Direction, 2016 issued by the Bank and as amended from time to time, in respect of their constituents. Other CSGL account holders shall follow the relevant guidelines on KYC issued by their respective regulators. The gilt accounts opened with a CSGL holder shall have unique numbers. iv. A constituent is permitted to open one or more gilt account with any of the CSGL account holders. This permission will be subject to the relevant guidelines/instructions on their operations, if any, issued by the constituent's respective regulators. v. The transfer of securities from/to a CSGL account shall be on Delivery versus Payment basis, except as provided in paragraph vi. of the guidelines. vi. Value Free transfer - For the purpose of these Guidelines, Value Free Transfers (VFT) of the securities shall mean transfer of securities from one CSGL account to another CSGL or SGL account without corresponding payment leg in the books of RBI. Value Free Transfers of securities shall be effected by CSGL holders in the manner as may be prescribed by the Bank. vii. The CSGL account holders must have appropriate Information Technology (IT) infrastructure to maintain accounts and put through deals on behalf of their constituents with adequate contingency/back-up plan to ensure business continuity. The IT infrastructure shall be subject to Information System (IS) audit by certified professionals every year and any observations made by them shall be immediately complied with. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Banking--Notification

No. IDMD.CDD. S788/11.22.001/2021-22, dtd. 22-9-2021 [Advt.-III/4/Exty./292/2021-22]

Constituents' Subsidiary General Ledger Account: Eligibility Criteria and Operational Guidelines

In exercise of the powers conferred by Section 4 of the Government Securities Act, 2006 (38 of 2006) (the Act), the Reserve Bank of India (the Bank) hereby specifies the conditions applicable henceforth for opening and maintenance of a Constituents' Subsidiary General Ledger (CSGL) account, as also the records to be maintained and procedures to be adopted by the CSGL account holders for safeguarding the interests of their constituents.

I. A Constituent Subsidiary General Ledger (CSGL) shall mean a subsidiary general ledger (SGL) account opened and maintained with the Bank by an agent on behalf of the constituents of such agent;

II. The Bank may open and maintain CSGL accounts for conduct of its operations and for such purposes the Bank may deem necessary.

III. Eligible Entities

The entities mentioned below are eligible to open and maintain a CSGL account with the Bank on behalf of their constituents-also known as 'Gilt Account Holders' (GAHs):

i. Licensed banks with minimum net worth of Rs.100 cr.

ii. Primary Dealers authorised by Reserve Bank of India

iii. Depositories as defined under Depositories Act 1996

iv. Clearing Corporation of India Limited or other Clearing Corporations as may be approved by the Bank

v. National Bank for Agriculture and Rural Development (NABARD)

vi. Stock Holding Corporation of India Ltd (SHCIL)

vii. Such other entities as may be allowed by the Bank from time to time.

IV. Operational Guidelines to be complied with by the CSGL Account Holders

i. An eligible entity will, in normal circumstances, be allowed to open and maintain only one CSGL account. In certain cases, the Bank may allow an entity to open additional CSGL accounts. A constituent is not permitted to open and maintain an SGL account with the Bank (except when the SGL account has been opened after specific approval of the Bank or for regulatory/margin purposes).

ii. The CSGL account holders shall ensure that the constituents for whom the gilt accounts are opened/maintained satisfy the eligibility conditions for holding Government securities in terms of the General Loan Notifications as also the specific Loan Notifications issued by the Government.

iii. The CSGL account holders, who are regulated by the Bank, shall follow guidelines on 'Know Your Customer' (KYC) Direction, 2016 issued by the Bank and as amended from time to time, in respect of their constituents. Other CSGL account holders shall follow the relevant guidelines on KYC issued by their respective regulators. The gilt accounts opened with a CSGL holder shall have unique numbers.

iv. A constituent is permitted to open one or more gilt account with any of the CSGL account holders. This permission will be subject to the relevant guidelines/instructions on their operations, if any, issued by the constituent's respective regulators.

v. The transfer of securities from/to a CSGL account shall be on Delivery versus Payment basis, except as provided in paragraph vi. of the guidelines.

vi. Value Free transfer - For the purpose of these Guidelines, Value Free Transfers (VFT) of the securities shall mean transfer of securities from one CSGL account to another CSGL or SGL account without corresponding payment leg in the books of RBI. Value Free Transfers of securities shall be effected by CSGL holders in the manner as may be prescribed by the Bank.

vii. The CSGL account holders must have appropriate Information Technology (IT) infrastructure to maintain accounts and put through deals on behalf of their constituents with adequate contingency/back-up plan to ensure business continuity. The IT infrastructure shall be subject to Information System (IS) audit by certified professionals every year and any observations made by them shall be immediately complied with.