MANU/SMFD/0008/2020
Ministry : Securities and Exchange Board of India
Department/Board : Investment Management Department
Circular No. : SEBI/HO/IMD/DF3/CIR/P/2020/130
Date : 22.07.2020
Notification/ Circulars Referred : Circular no. CIR/IMD/DF/21/2012 dated September 13, 2012 MANU/SMFD/0015/2012
Citing Reference:
Circular no. CIR/IMD/DF/21/2012 dated September 13, 2012 MANU/SMFD/0015/2012 Referred
All Mutual Funds (MFs)/
Asset Management Companies (AMCs)/
Trustee Companies/ Board of Trustees of MutualFunds/
Association of Mutual Funds in India (AMFI)
Sir / Madam,
Transaction in Corporate Bonds/Commercial Papers through RFQ platform and enhancing transparency pertaining to debt schemes
1. In order to enhance the transparency and disclosure pertaining to debt schemes and investments by mutual funds in Corporate Bonds/Commercial Papers, SEBI based on the recommendation of Mutual Fund Advisory Committee (MFAC) has decided the following:
A. In order to increase the liquidity on exchange platform,
i. On monthly basis, Mutual Funds shall undertake at least 10% of their total secondary market trades by value (excluding Inter Scheme Transfer trades) in the Corporate Bonds by placing/seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges. The percentage as specified shall be reckoned on the average of secondary trades by value in immediate preceding three months on rolling basis.
For example, for the month of October 2020, Mutual Funds shall undertake 10% (by value) of their average secondary market trades (excluding IST) done in immediate preceding three months i.e. July 2020, August 2020 and September 2020 for Corporate Bonds by placing / seeking quotes through RFQ platform of stock exchanges.
ii. All transactions in Corporate Bonds and Commercial Papers wherein Mutual Fund is on both sides of the trade shall be executed through RFQ platform of stock exchanges in one-to-one mode.