SEBI Mandates Debt Issuers to Contribute 0.5 Basis Points to LPCC Fund for Enhanced Liquidity in Repos.

The circular mandates eligible issuers of debt securities to contribute to the Settlement Guarantee Fund of the Limited Purpose Clearing Corporation (LPCC) for repo transactions. The Securities and Exchange Board of India (SEBI) requires a collection of 0.5 basis points of the issuance value annually, to be collected upfront before listing. This applies to both public issues and private placements under SEBI regulations. Recognized as LPCC, AMC Repo Clearing Limited will oversee these transactions. The provisions apply to offer documents filed from May 1, 2023, and are aimed at enhancing market liquidity and reducing funding costs.

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