SEBI Eyes Market Making & Lower Entry Costs to Strengthen Corporate Bond Liquidity

India’s Securities and Exchange Board (SEBI) is actively working on market-making mechanisms, reducing entry costs, and addressing information asymmetry to enhance corporate bond market liquidity. The regulator aims to increase participation from mid-tier corporates, ensuring better price discovery and investor confidence.

 

Key Highlights:

 

✅ Market-Making Proposal: SEBI is considering introducing market makers—entities that provide buy and sell quotes to improve secondary market liquidity. ✅ Lower Entry Costs: The regulator is exploring reducing transaction costs for corporate bond issuers, making it easier for mid-sized firms to access funding. ✅ Information Asymmetry Fix: SEBI plans to streamline disclosure norms, ensuring transparent pricing and better investor protection.

✅ Retail Participation Boost: A proposal to lower the face value of non-convertible debentures (NCDs) from ₹1 lakh to ₹10,000 aims to increase retail investor involvement.

✅ Regulatory Framework Expansion: SEBI is working on new guidelines to strengthen governance and risk management in the corporate debt market.

 

With these strategic reforms, SEBI aims to deepen India’s corporate bond market, fostering greater financial inclusion and investment opportunities.

 

Source: SEBI, Financial Express, IndiaCorpLaw