Sebi lets bourses offer futures contracts on corporate bond indices
Mumbai: The Securities and Exchange Board of India (Sebi) on Wednesday allowed stock exchanges to introduce futures contracts on corporate bond indices.The move is aimed to enhance liquidity in the bond market and also to provide an opportunity to investors to hedge their positions.To start with, exchanges have been permitted to launch derivative contracts on indices of corporate debt securities rated AA+ and above. Sebi said constituents of the index should have adequate liquidity and diversification at the issuer level and it should be reviewed periodically. The constituents should be aggregated at the issuer level for the purpose of determining exposure limits for a single issuer, group and sector. A single issuer should not have more than 15% weight in the index, which should have at least eight issuers, it said.
Mumbai: The Securities and Exchange Board of India (Sebi) on Wednesday allowed stock exchanges to introduce futures contracts on corporate bond indices.The move is aimed to enhance liquidity in the bond market and also to provide an opportunity to investors to hedge their positions.To start with, exchanges have been permitted to launch derivative contracts on indices of corporate debt securities rated AA+ and above. Sebi said constituents of the index should have adequate liquidity and diversification at the issuer level and it should be reviewed periodically. The constituents should be aggregated at the issuer level for the purpose of determining exposure limits for a single issuer, group and sector. A single issuer should not have more than 15% weight in the index, which should have at least eight issuers, it said.
