SEBI Pushes for Corporate Bond Market Revamp

SEBI Chairman Tuhin Kanta Pandey emphasizes the necessity to deepen India's corporate bond market, currently at 16% of GDP. Focusing on expanding issuer bases and improving issuance depth, SEBI is set to enhance secondary market liquidity with a market-making framework while strengthening regional regulatory presence.

The Securities and Exchange Board of India (SEBI) is poised to amplify its efforts in transforming the nation's corporate bond market, SEBI Chairman Tuhin Kanta Pandey revealed today. Addressing several structural avenues, he highlighted imminent reforms aimed at bolstering market liquidity and expanding regional regulatory frameworks.

Pandey disclosed a series of foundational measures such as the Electronic Book Provider (EBP) for crucial price discovery, the Request for Quote (RFQ) platform facilitating robust secondary market trades, and Online Bond Platform Providers (OBPPs) enabling retail investment. These initiatives, he suggests, are vital as the bond market stands at approximately 16% of GDP.

The Chairman discussed broader reforms necessary for market maturity, specifically increasing the issuer base and embracing lower-rated bonds, thus fostering a more vigorous trading environment. Additionally, Pandey indicated the imminent roll-out of market-making frameworks and highlighted RBI's proposals for bond derivatives, all set to propel the corporate bond market into its next growth phase.

In a bid to decentralize SEBI's regulatory influence, Pandey announced plans to establish eight new regional offices, complementing the existing infrastructure, to enhance efficacy at the state level. Furthermore, he introduced the Swagat FI framework to streamline registration for select global financial entities, ensuring a balance between regulatory compliance and operational ease.

(With inputs from agencies.)