The Securities and Exchange Board of India (Sebi) will ask the two stock exchanges to start trading in corporate bonds shortly, sources close to the developments said.The much-awaited trading in corporate bonds will start on the National and the Bombay Stock Exchanges from July 1. This is expected to energise the moribund debt market.
To begin with, trading would be through order matching as recommended by the R H Patil Committee. The committee had suggested various measures to activate the corporate bond market. The anonymous order matching would come into place only at a later stage, when the exchanges were ready, the sources added.
Banks and institutions will be allowed to trade through either the stock exchanges or via the OTC (over-the -counter). If they wanted to go through the stock exchanges, they could conduct the trading through the stock broking members, the sources added.
All transactions in corporate bonds of the value of Rs 1 lakh or above are required to be reported to the corporate bond platform. As the platform is purely for reporting purposes, the stock exchanges had no role or liability for settlement of these trades. The intermediaries and contracting parties were asked to settle the trades bilaterally.
Read more in The Business Standard article.
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