AIFs Asked to Undertake 10% of Secondary Market Trades in Corporate Bonds By Placing Quotes on RFQ Platform
Moneylife Digital Team 02 February 2023
Market regulator Securities and Exchange Board of India (SEBI) has asked alternative investment funds (AIFs) to undertake at least 10% of their secondary market trades in corporate bonds by value in a month by placing quotes on the request for quote (RFQ) platforms. 
 
In a circular, the market regulator says, “To increase the liquidity on RFQ platform of stock exchanges and to enhance the transparency and disclosure pertaining to trading in the secondary market in corporate bonds, SEBI has in past prescribed stipulations for transactions on RFQ  platform by mutual funds, portfolio management services, and stock brokers….it is stipulated that AIFs shall undertake at least  10% of their total secondary market trades in corporate bonds by value in a month by placing quotes on the RFQ platform.”
 
Earlier in a circular dated 19 October 2022, SEBI stated that quotes on the RFQ platform can be placed to an identified counterparty (one-to-one mode) or to all the participants (one-to-many mode). In the case of transactions in corporate funds where AIFs come in, both sides will be executed through the RFQ platform in a one-to-one mode. 
 
However, according to the new circular, any transaction entered by an AIF in corporate bonds in the one-to-many mode, which gets executed with another AIF, should be counted in ‘one-to-many mode’ and not in ‘one-to-one mode’.
 
 
Comments
ArrayArray
Free Helpline
Legal Credit
Feedback