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Corporate Bond Index Derivatives: SEBI-RBI Talks

22 September 20251 min read
BANKING & FINANCECorporate BondIndex Derivatives:SEBI-RBI Talks22 September 2025safalsetu.com

Why in the news

SEBI and RBI were discussing derivatives on corporate bond indices to enliven corporate debt trading, reviving futures SEBI had permitted in January 2023.

Key facts

  • Instrument: Cash-Settled Corporate Bond Index Futures (CBIF), for launch by stock exchanges.
  • Eligibility: indices of corporate bonds rated AA+ and above only.
  • Settlement: no bonds change hands; the gap between contract price and final index value is paid in cash.
  • Investors can take a view on a basket of high-quality bonds.

Significance

  • Hedges interest rate and credit risk; improves liquidity and participation.
  • Aids price discovery and debt market infrastructure.

Exam angle

  • CBIF: cash settled; minimum bond rating AA+.
  • Regulators in talks: SEBI and RBI.

Test yourself

1. Corporate Bond Index Futures cleared by SEBI in January 2023 are settled how?

They are cash-settled based on contract price versus final index value.

2. SEBI allows CBIF only on indices of corporate bonds rated at least what?

Eligible indices comprise bonds rated AA+ and above.

3. Which two regulators were discussing corporate bond index derivatives?

The notes say SEBI and RBI were in discussions.

This topic is part of Daily Current Affairs 20 September 2025 (12 topics).

All topics of the dayDay quizSeptember 2025

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