MANU/SMFD/0014/2023
Ministry : Securities and Exchange Board of India
Department/Board : Investment Management Department
Circular No. : SEBI/HO/IMD/PoD2/P/CIR/2023/128
Date : 27.07.2023
Notification/ Circulars Referred : Notification no. SEBI/LAD- NRO/GN/2023/132 dated June 15, 2023 MANU/SREG/0020/2023;Guarantee
Scheme for Corporate Debt (GSCD) MANU/EAFF/0058/2023
Subject: Capital Market
Citing Reference:
Notification no. SEBI/LAD- NRO/GN/2023/132 dated June 15, 2023 MANU/SREG/0020/2023 Referred
Guarantee
Scheme for Corporate Debt (GSCD) MANU/EAFF/0058/2023 Referred
Asset Management Companies (AMCs)/
Trustee Companies/ Board of Trustees of Mutual Funds/
Trustee Company of CDMDF/
Association of Mutual Funds in India (AMFI)/
Stock Exchanges/
Clearing Corporations
Sir / Madam,
Framework for Corporate Debt Market Development Fund (CDMDF)
1. Chapter III-C has been inserted vide amendments to SEBI (Alternative Investment Funds) Regulations, 2012 vide Gazette notification no. SEBI/LAD- NRO/GN/2023/132 dated June 15, 2023 in order to facilitate constitution of an Alternative Investment Fund namely, Corporate Debt Market Development Fund ("CDMDF" or "the Fund"), to act as a Backstop Facility for purchase of investment grade corporate debt securities, to instil confidence amongst the participants in the Corporate Debt Market during times of stress and to generally enhance secondary market liquidity by creating a permanent institutional framework for activation in times of market stress.
2. CDMDF shall comply with the Guarantee
Scheme for Corporate Debt (GSCD) as notified by Ministry of Finance vide notification no.
G.S.R. 559(E) dated July 26, 2023, which includes the Framework
for Corporate Debt Market Development Fund.
3. In addition to the abovementioned scheme as mentioned at para 2 above, CDMDF shall comply with following:
3.1 The fund shall deal only in following securities during normal times:
• Low duration Government Securities
• Treasury bills
• Tri-party Repo on G-sec
• Guaranteed corporate bond repo with maturity not exceeding 7 days.
3.2 The fees and expenses of the Fund shall be as follows:
• During Normal times: (0.15% + tax) of the Portfolio Value charged on daily pro-rata basis.
• During Market stress: (0.20% + tax) of the Portfolio Value charged on daily pro-rata basis.
• "Portfolio Value" means the aggregate amount of portfolio of investments including cash balance without netting off of leverage undertaken by the Fund.
Clarification:
i. The taxes as mentioned above shall include all ki........