THE PLAN TO expand the corporate bond market faces an unexpected impediment because Sebi is considering tightening control of trading platforms that allow investments in company debt in just a few clicks.
While the proposed framework is designed to protect investors and is therefore being welcomed by some, a few of the Sebi proposals could actually prove counterproductive and hurt liquidity, according to experts who spoke to Bloomberg. That's because the sale of unlisted debt would be banned, platforms would be forbidden to sell privately placed corporate notes on to non-institutional investors soon after acquiring them, and trades would need to be settled via routes that are not commonly used at present.
Market participants have till August 12 to give their input on the matter.
"Pursuant to the discussions, it was observed that there is an imperative need to govern the operations of these online bond platforms, keeping in mind the core objective of facilitation of efficient trading and robust investor protection norms for investors, particularly non-institutional investors," the Sebi discussion paper issued on July 21 said.
This story is from the August 09, 2022 edition of Financial Express Mumbai.
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This story is from the August 09, 2022 edition of Financial Express Mumbai.
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