1. Banks, Primary Dealers and Satellite Dealers (hereinafter referred to, purely for the sake of convenience, as Gilt Dealers- GDs) are provided the facility to maintain a second SGL Account in the books of Public Debt Offices. Described as "Constituents' SGL Account", the GDs can, in these accounts hold government securities the beneficial ownership of which belong to their constituents. The system of constituents SGL Accounts is intended to facilitate a simple and indirect form of investment in government securities by investors.


2. Such beneficial ownership of the constituents is not recognized in the Public Debt Rules 1946. The relationship between the GDs and their constituents is contractual while that between the GDs, as holders of government securities, and RBI/Government is governed by the Public Debt Act and the rules made thereunder.


3. In the context of gradual deepening of the government securities market and the policy to promote the retail segment of the market, it is felt desirable and expedient to frame a set of guidelines governing the maintenance of the Constituents' SGL Accounts by GDs. The privilege to maintain Constituents' SGL Accounts by any GD is conditional on their strict adherence to these guidelines.
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