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New Rules May Pull Rug Out From India’s Bid to Boost Market

  • Regulator seeks feedback by Aug. 12 on proposed rules
  • Authority looks to tighten oversight as bond platforms boom
Updated on

India’s plan to expand its corporate bond market faces an unexpected impediment because the regulator is considering tightening control of trading platforms that allow investments in company debt in just a few clicks. 

While the proposed framework is designed to protect investors and is therefore being welcomed by some, a few of the proposals by the Securities and Exchange Board of India could actually prove counterproductive and hurt liquidity, according to experts who spoke to Bloomberg. That’s because the sale of unlisted debt would be banned, platforms would be forbidden to sell privately placed corporate notes on to non-institutional investors soon after acquiring them, and trades would need to be settled via routes that today are not commonly used.