SEBI requires MFs to undertake a minimum of 25% in Corporate Bonds & 10% in Commercial Papers of total trades

Circular SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/641, Dated: October 6, 2021

Based on the recommendations of the Mutual Fund Advisory Committee (MFAC), and in order to further increase the liquidity on exchange platforms, the market regulator, SEBI has revised requirements for mutual funds to undertake on monthly basis from a Minimum of 10 % to 25% of total secondary market trades by value in Corporate Bonds on the Request for Quote (RFQ) platform of stock exchanges.

In addition to the foregoing, the Mutual Funds shall now undertake a minimum of 10% of their total secondary market trades by value in Commercial Papers by RFQ platform of stock exchanges.

However, the percentages as specified above shall be reckoned on the average of secondary trades by value in the immediate preceding three months on a rolling basis. Mutual Funds are permitted to accept the Contract Note from the brokers for transactions carried out in One to One (OTO) and One to Many (OTM) modes of the RFQ platform.

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