SEBI Proposals on EBP and RFQ Platforms for Bond Market
Why in the news
SEBI put out proposals to strengthen the corporate bond market through changes to the Electronic Book Provider (EBP) and Request for Quote (RFQ) platforms, aiming at more liquidity and transparency.
Proposed EBP changes
| Item | Now | Proposed |
|---|---|---|
| EBP for private placements | Issues above ₹50 crore | Issues above ₹20 crore |
| InvITs and REITs | No specific rule | Mandatory above ₹1,000 crore |
| Greenshoe portion | Up to 5x base issue | Up to 3x base issue |
| Settlement | T+2 | T+1 |
| Listing | T+3 days | T+2 days |
| Bidding for large issues | Not compulsory | Open bidding compulsory above ₹1,000 crore |
About RFQ and its proposed changes
- An RFQ platform lets investors ask several dealers for quotes to buy or sell bonds and other debt instruments.
- Yield-to-price calculation for non-convertible securities would follow the government securities method.
- Cash-flow dates for interest, dividend or redemption would follow the scheduled due date, without day-count adjustment.
- Goal: simpler trading and fewer calculation complexities.
Expected impact
- More bond issues under transparent bidding.
- Faster settlement and listing improve efficiency.
- Open bidding for big issues should improve price discovery and market depth.
- Easier RFQ trading for retail and institutional users.
Exam angle
- Regulator: SEBI; platforms: EBP and RFQ.
- Numbers: ₹50 crore to ₹20 crore; T+2 to T+1.