Securities and Exchange Board of India has issued circular permitting BSE and NSE to launch corporate bond trading platforms to enable efficient price discovery and reliable clearing and settlement in a gradual manner.
“To begin with, the trade matching platform shall be order driven with essential features of OTC market. BSE and NSE would make use of their existing infrastructure with necessary modifications to set up the said platform with effect from July 1, 2007,” says the SEBI press release.
The minimum trading value for Corporate Bonds for all entities has been reduced to Rs 1 lakh from the existing Rs10 lakh. The stock exchanges may also have a limited segment for transactions in smaller market lots, says the circular. Once the trade matching system stabilises BSE and NSE would be allowed to move to an anonymous order matching system.