As part of efforts to develop the corporate-bond market, trading platforms for the fledgling instruments are expected to be operational from July on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Sebi has informed that the trading platforms for corporate bonds at the two premier exchanges—BSE and NSE—are expected to be operational from 1 July 2007, sources told PTI.
The trading platforms would help in developing the corporate-bond market fast by making them liquid so as to provide investors another option for diversification of risk.
A reporting platform for providing quotes for corporate bonds at BSE has been functional since 12 January and at NSE from March.
However, sources said exchange-traded market for corporate bonds are no guarantee that this market would be developed in the country.
Institutions are the major participants in the corporate-bonds market, they said. Even in the United States, major corporate bonds are outside the exchange-traded platform, they said.
Creating exchange-traded platform for corporate bonds is part of many recommendations given by the high-level R.H. Patil committee in 2005.
The government accepted its recommendations in Budget 2006-07.