SEBI Simplifies Bond Pricing with Standard Yield Rules on RFQ Platform

SEBI Circular: SEBI/HO/DDHS/DDHSPOD1/P/CIR/2025/72; Dated: 13.05.202

The Securities and Exchange Board of India (SEBI) has introduced significant updates to the bond market framework to bring more transparency and simplicity in pricing mechanisms, particularly on the Request for Quote (RFQ) platform.

1. Simplified Yield-to-Price Calculation

To streamline yield computations, SEBI has mandated that scheduled payment dates be used for calculating bond yields—without any day count adjustments. This change aims to remove complexities and create uniformity in how bond prices are derived, making it easier for market participants to understand and compare yields.

2. Mandatory Disclosure of Cash Flow Schedules

Under the new framework, issuers of debt securities are now required to –

• Disclose detailed cash flow schedules (including principal and interest payments)
• Ensure updates to these schedules are made in the Corporate Bond Database maintained by the depositories
• Submit or update this information within one working day of issuance or any change

This will enable investors and analysts to better assess risk and return profiles of bond instruments.

3. Applicability to Existing and New Securities

The revised rules are applicable to both newly issued and existing debt securities. Issuers must ensure compliance by August 18, 2025, giving them a clear timeline to adapt their systems and disclosures.

4. Objective – Transparency, Efficiency & Investor Protection

SEBI’s move is aimed at –

• Enhancing transparency in the debt market
• Simplifying operations for all stakeholders
• Improving investor protection through timely and accurate disclosures

By standardising the approach to yield calculation and cash flow reporting, SEBI seeks to foster greater trust and participation in the corporate bond market.

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