On 1-2-2023, the Securities and Exchange Board of India has issued a circular on Transaction in Corporate Bonds through Request for Quote platform by Alternative Investment Funds to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Key Points:

  1. Alternative Investment Fund (‘AIF’) will undertake at least 10% of investors total secondary market trades in Corporate Bonds by value in a month by placing/ seeking quotes on the Request for Quote (‘RFQ’) platform.

  2. According to the SEBI circular dated 19-10-2022, quotes on RFQ platform can be placed to an identified counterparty (‘one to one’ mode) or to all the participants (‘one to many’ mode).

  3. All transactions in Corporate Bonds where AIF is on both sides of the trade will be executed through RFQ platform in ‘one to one’ mode. However, any transaction entered by an AIF in Corporate Bonds in ‘one to many’ mode which gets executed with another AIF, will be counted in ‘one to many’ mode.

  4. The above requirements will come into effect from 1-4-2023.

*Kriti Kumar, Editorial Assistant has reported this brief.

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