H R Khan committee on development of corporate bond in August 2016 recommended that foreign portfolio investors be allowed to trade directly in corporate bonds.
In accordance with it, the Securities Exchange Board of India now allowed foreign portfolio investors (FPI) to trade directly in corporate bonds without needing any broker.
FPIs will have an option to “directly access corporate bond market without brokers as has been allowed to domestic institutions such as Banks, Insurance Companies, Pension Funds etc”.
The FPIs can only do the trading for their own need and not on behalf of some others.
Access to Over-the -Counter (OTC), Request for Quote (RFQ) and Electronic Book Provider (EBP) platforms of recognised stock exchanges will be provided to FPIs only for proprietary trading and participation of FPIs will help in deepening the Corporate Bond market.
Sebi said it would amend necessary acts to accommodate the change.
