Mechanism for public offer of govt bonds to be out soon: BSE

To encourage retail participation in government bonds, top stock exchange BSE today said that a mechanism would be in place in the next 6-9 months for a 'public offer' of such debt instrument.
"The government can raise funds by initial public offer (IPO) of the government bonds through the e-IPO system. This would reduce the government's servicing cost and is an additional avenue for the government to raise funds and provides an avenue for the retail investors to participate in government bonds," BSE Managing Director & CEO Ashishkumar Chauhan told reporters here.
Chauhan was speaking on the sidelines of celebration of the exchange's 140th anniversary.

Noting that government bonds are basically risk-free instruments, Chauhan said the government and Reserve Bank of India (RBI) is in talks with the stock exchanges about public offer of government bonds.
"In 6-9 months we believe there would be a good mechanism to offer and trade government bonds in a easier way through depositories," he noted and added that the exchange is keen on bringing in more risk-free instruments to make attract larger number of investors into the capital markets.
Talking about BSE's plans to set up a commodity bourse, Chauhan said the stock exchange is awaiting the new policy that would be issued on completion of Sebi-FMC merger.

On setting up operations in Gujarat International Finance Tec-City (GIFT) in Gandhinagar, he said the BSE is waiting for clarity on taxation norms as well as information on which provisions of the companies act would be applicable in GIFT.

The guidelines related to GIFT are expected to be out before September, he added.
The BSE, which is Asia's oldest stock exchange, was one of the first to announce establishing the country's first International Exchange at the international financial services centre (IFSC).
Chauhan also said that as derivatives carry a high risk rate, the government and the regulator should look at excluding retail investors from trading in them.

"It is clear that we need to relook at what type of investor participation we need in the instrument," he added.