The Negotiated Dealing System (NDS) is a trading system developed by India's National Securities Clearing Corporation (NSCCL) to facilitate electronic trading and settlement of government securities. It connects members from the Primary Dealers (PDs) and Market Makers (MMs) of the debt market to the Inter-Bank Debt Market.

It serves as a central gateway for centralized settlement and registration of securities issued by the Reserve Bank of India. The NDS provides an efficient and cost-effective platform for members of both the debt and equity markets to trade, deal and settle their trades quickly and securely. It seeks to bring transparency and liquidity to the Indian debt market.

The NDS order matching system (NDS-OM) is a major component of the NDS. The NDS-OM system provides two levels of market participation – Pre-Market and At-Market. The Pre-Market facilitates a two-way market between the Primary Dealers and Market Makers, who are required to provide quotes and execute trades with each other in order to lock in market $ prices and volume. The At-Market occurs within the NDS-OM system, which allows any interested party to submit quotes, execute trades and settle them at the negotiated prices.

The NDS-OM system consists of several modules that allow members to access prices, submit orders and monitor the progress of their orders, as well as modify, delete, or cancel orders as and when required. The NDS-OM also supports simultaneous trading between multiple dealers at the same time, thus reducing transaction costs by eliminating the need for manual order matching.

The NDS seeks to promote and secure an efficient, secure and cost-effective trading mechanism for Indian government securities. It provides an effective platform for both members of the debt and equity markets to conduct trades at a fair and transparent price with well-defined settlement cycles. It also provides improved liquidity and better price discovery in the Indian securities market and reduces counterparty risk.

In conclusion, the Negotiated Dealing System (NDS) is a one-stop shop for trading, dealing and settling Indian government securities. It has greatly reduced the transaction costs and improved the liquidity and efficiency of trading these securities. Furthermore, it helps to bring transparency, security and standardization to the Indian debt and equity markets.