Sebi proposes key changes for EBP, RFQ platforms to strengthen debt market

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Securities and Exchange Board of India (Sebi) on Thursday proposed changes to norms for the Electronic Book Provider (EBP) platform and the Request for Quote (RFQ) platform in a bid to boost liquidity in the corporate bond market and improve transparency.

 

The regulator has proposed making EBP mandatory for all private placement issues of issue sizes over ₹20 crore, down from the present threshold of ₹50 crore.

 

Further, for private placements of Investment Infrastructure Trusts (InvITs) and Real Estate Investment Trusts (REITs) above ₹1,000 crore, issuers will have to access the EBP platform.

 

The greenshoe portion in issues may also be reduced to three-times the base issue size from the current five times.

 

For EBP, Sebi has also proposed settlement on a T+1 cycle and reduction in listing time from T+3 to T+2. Other proposals include mandatory open bidding for issue sizes above ₹1,000 crore.

 

For RFQ, the regulator has proposed aligning the yield to price computation days for non-convertible securities in the same way as government securities.

 

“In order to simplify the process of yield to price computation for nonconvertible securities, cash flow dates regarding payment of interest/dividend/redemption for the securities traded on (the) RFQ platform shall not be adjusted for day count convention, that is, they shall be based on the due date of payment as per the cash flow schedule and not as per the date of payment,” Sebi stated.