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Mutual funds: Sebi seeks to boost transparency in debt schemes transactions

·1-min read

New Delhi, Jul 22 (PTI) Markets regulator Sebi on Wednesday came out with measures to enhance transparency in transactions pertaining to debt schemes and investments by mutual funds in commercial papers.

The steps have been decided by Sebi on the basis of recommendations by the Mutual Fund Advisory Committee (MFAC).

On a monthly basis, mutual funds need to undertake at least 10 per cent of their total secondary market trades, in terms of value, in corporate bonds on the Request for Quote (RFQ) platform of stock exchanges, according to a circular.

When calculating the value for this purpose, inter-scheme transfer trades would be excluded.

'The percentage as specified shall be reckoned on the average of secondary trades by value in immediate preceding three months on rolling basis,' the Securities and Exchange Board of India (Sebi) said.

According to the watchdog, the move would also help increase the liquidity on the exchange platform.

RFQ is an electronic platform that provides more transparency and better efficiency. It is for online trade execution and settlement platform for trading of corporate bonds, commercial papers and G-Secs, among others.

All transactions in corporate bonds and commercial papers wherein mutual fund is on both sides of the trade would be executed through RFQ platform in one-to-one mode, Sebi noted.

Further, the regulator said certain disclosures for debt schemes should be done on a fortnightly basis, within five days of every fortnight.

'In addition to the current portfolio disclosure, yield of the instrument shall also be disclosed...,' the circular said.

The latest measures would be in force from October 1. PTI SRS RAM HRS