Sebi proposes measures to boost liquidity in corporate bond market

With an aim to boost liquidity in the secondary market for corporate bonds, markets regulator Sebi on Friday came out with a proposal for enabling direct participation by clients in the tri-party repo segment for corporate bonds. The proposal will facilitate direct participation in repo transactions in corporate bonds by entities which cannot take direct membership of the stock exchange, clearing corporation such as NBFCs, insurance companies, mutual funds, etc. In its consultation paper, Sebi has suggested for facilitating transactions directly between clients and the Limited Purpose Clearing Corporation (LPCC) in the tri-party repo segment as well as to enabling contribution by such clients directly to the Core SGF (Settlement Guarantee Fund). "In order to strengthen the risk management system of the LPCC to meet the contingencies arising on account of possible failure of the clients/ participants as well, it is essential that the contribution to the Core SGF can also be made by .

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