MANU/SMFD/0032/2021

Ministry : Securities and Exchange Board of India

Department/Board : Investment Management Department

Circular No. : SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/641

Date : 06.10.2021

Notification/ Circulars Referred : Circular SEBI/HO/IMD/DF3/CIR/P/2020/130 dated July 22, 2020 MANU/SMFD/0008/2020

Citing Reference:
Circular SEBI/HO/IMD/DF3/CIR/P/2020/130 dated July 22, 2020 MANU/SMFD/0008/2020  Referred

All Mutual Funds/
Asset Management Companies (AMCs)/
Trustee Companies/Boards of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)

Sir/ Madam,

Minimum percentage of trades carried out by mutual funds through RFQ platform

1. SEBI, vide circular SEBI/HO/IMD/DF3/CIR/P/2020/130 dated July 22, 2020, has mandated mutual funds to undertake at least 10% of their total secondary market trades in Corporate Bonds through RFQ platform of stock exchanges.

2. Based on the recommendations of Mutual Fund Advisory Committee (MFAC), in order to further increase the liquidity on exchange platforms, para 1(A)(i) of the aforementioned SEBI circular is modified as under:

a. On monthly basis, Mutual Funds shall undertake minimum 25% of their total secondary market trades by value (excluding Inter Scheme Transfer trades) in Corporate Bonds by placing/seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges and

b. On monthly basis, Mutual Funds shall now undertake minimum 10% of their total secondary market trades by value (excluding Inter Scheme Transfer trades) in Commercial Papers by placing/seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges.

The percentages as specified above shall be reckoned on the average of secondary trades by value in immediate preceding three months on rolling basis.