Corporate bonds get new platform

The Securities and Exchange Board of India (Sebi) today paved the way for creating uniform platform for the trading of corporate bonds in the country.

Effective January 1, 2007, all transactions in corporate bonds of Rs 1 lakh and above are to be reported to the proposed platform to be operated by the Bombay Stock Exchange (BSE) within 30 minutes of closing the deal and the information on the settlement has to be reported within one trading day.

The reporting platform will function from 10 am to 5.30 pm in Mumbai.

The Sebi today directed the exchanges to make necessary amendments to the listing agreement and regulations for its implementation.

The government in the last Union Budget had proposed to create this platform, which would include all listed debt securities issues by banks, public sector undertakings, municipal corporations and corporates.

In the first phase, the BSE would be setting up and maintaining a platform, reporting to which has been made mandatory for all issuers, intermediaries and contracting parties, irrespective of their registration with the market regulator.

In case the trade is completed through intermediaries, they would be responsible for its reporting. "If executed otherwise, reporting will be made either through an authorised intermediary or directly by the contracting parties," the Sebi release said.

The BSE would publish the reported data on website of the platform. Market intermidiateries, who approach BSE for the trading would be given access to the platform for reporting. Non-members would also be enabled through virtual private network (VPN).

Issuers are requested to disclose all material information like rating on the instruments and the rating migrations as and when they take place, record date, put/call option dates, failing to which action may be initiated against the issuer, Sebi said.

Sebi through the circular issued today, superceded the provisions of its earlier circulars issued on September 30 and December 22.

It has also asked the exchanges to communicate the status of the implementation in their Monthly Development Report to the regulator.