Boosting Corporate Bond Trading: Sebi and RBI's Progressive Talks

Sebi and RBI are in talks to enhance corporate bond trading through index derivatives. Despite growth in market size, corporate bonds lag behind equities in trading volume. Recent regulatory measures by Sebi haven't gained traction, highlighting the need for capacity building and increased investor confidence, especially for municipal bonds.

The Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are actively discussing the development of corporate bond index derivatives to invigorate trading activities in corporate debt securities, according to Sebi whole-time member Ananth Narayan G.

During his speech at the ASSOCHAM National Council for Corporate Bonds, Narayan emphasized that corporate bond index derivatives represent a significant advancement. Ongoing discussions between Sebi and RBI aim to bring parity between bond and equity trading, which could lead to substantial growth in the investment sector.

Despite a rising volume of outstanding corporate bonds and recent measures by Sebi, the market continues to be dominated by institutional investors, underscoring the need for enhanced capacity building and growing investor confidence, particularly in municipal bonds.

(With inputs from agencies.)