Corporate Bond Market – Launch of Trading Platform

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....on Budget proposals for developing an exchange traded market for Corporate Bonds, SEBI vide circulars No. SEBI/ CFD/DIL/BOND/1/2006/12/12 dated December 12, 2006 and No. SEBI/CBM/ BOND/1/2007/02/03 dated March 01, 2007 authorized BSE and NSE to set up and maintain corporate bond reporting platforms to capture all information related to trading in corporate bonds as accurately and as close to execution as possible. III. In the second phase of development, it has been decided to permit BSE and NSE to have in place corporate bond trading platforms to enable efficient price discovery and reliable clearing and settlement in a gradual manner. To begin with, the trade matching platform shall be order driven with essential features of OTC market....

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....segment. BSE and NSE shall ensure that the norms are harmonious between the exchanges. 7. The entities trading in listed corporate debt securities may settle their trades bilaterally between them. They may also use the services of the stock exchanges for clearing and settlement. 8. BSE and NSE shall ensure that the shut period in corporate bonds shall be reduced and aligned to that applicable for Government Securities within a reasonable period of time. 9. All entities including Qualified Institutional Investors (QIBs), shall trade in corporate bonds subject to a minimum value of Rs. 1 lakh. Exchanges may also have a limited segment for transactions in smaller market lots. 10. The Actual/Actual day count ....

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....as may be, apply to the anonymous order matching system. VI. Amendments to the listing agreement for debentures In order to facilitate development of a vibrant market in corporate debt instruments, it has been decided to further amend the listing agreement for debentures issued by circular No. SEBI/ CFD/ DIL/ CIR- 39 /2004/ 11/ 01 dated November 1, 2004 and further amended by circular No. SEBI/ CFD/ DIL/ LA/ 1/ 2007/20/03 dated March 20, 2007, as follows: 1. In clause 1.4, for sub-clause (c), the following sub-clause shall be substituted, namely: "The issuer agrees to ensure that services of ECS (Electronic Clearing Service), Direct Credit, RTGS (Real Time Gross Settlement) or NEFT (National Electronic Funds Transfer....

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....d companies. VIII. Direction to Stock Exchanges BSE and NSE are directed to: a. Make necessary amendments to the listing agreement, bye- laws, rules and regulations for the implementation of the above decision immediately, as may be applicable and necessary. b. Bring the provisions of this circular to the notice of the entities in both equity and debt segments, member brokers, clearing members of the Exchange and also to disseminate the same on the website for easy access to the investors; and c. Communicate to SEBI, status of the implementation of the provisions of this circular in the next Monthly Development Report. IX. This circular is issued in exercise of powers conferred by sub-section (1) of Secti....