Sebi asks MFs to direct more trades towards RFQ platform on exchanges

Market regulator Sebi has directed mutual funds (MFs) to undertake minimum 25 per cent and 10 per cent of their monthly secondary market trades in corporate bonds and commercial paper respectively on the so-called Request for Quote (RFQ) platform of stock exchanges.

In July 2020, Sebi had mandated MFs to undertake at least 10 per cent of their total secondary market trades in corporate bonds through the RFQ platform.

The higher limits will come into force with effect from December 1, 2021.

The RFQ platform allows interaction amongst the market participants who wish to negotiate transactions amongst themselves. This platform is a participant-to-participant model where an initiator may request other participants for a quote in corporate bonds, commercial papers, certificates of deposit, government securities or state development loans.

The platform provides an electronic form of transacting in over the counter deals.