Posts Tagged ‘sub-accounts’

Corporate Bonds to be Routed through Clearing Houses: SEBI

Trade in corporate bonds would have to be routed through clearing houses from very soon

Trade in corporate bonds would have to be routed through clearing houses from very soon

Market regulator SEBI has said that trade in corporate bonds would have to be routed through clearing corporations from December 1, a move that experts say would check factors that aggravated financial crisis.

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Directives of the Sebi will be applicable to corporate bond trading that are not currently settled through clearing corporations or clearing houses of stock exchanges.

“It has now been decided that, all trades in corporate bonds between specified entities shall necessarily be cleared and settled through the National Securities Clearing Corp (NSCCL) or Indian Clearing Corp (ICCL),” it said.

The specified entities are mutual funds, foreign institutional investors/ sub-accounts, venture capital funds, foreign venture capital investors, portfolio managers, and RBI regulated entities, the Sebi said.

“The provisions of this circular shall be applicable to all corporate bonds traded Over The Counter (OTC) or on debt segment of stock exchanges on or after Dec 01, 2009,” it said.

SMC Capitals Equity Head Jagannadham Thunuguntla said, “It is a learning from the global financial crisis.  One of the major reasons for the crisis to be so severe was that many fancy financial instruments were traded OTC with no records.”

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SEBI Allocates Thousand Crores Govt Debt to FIIs :)

govt-debt

Market regulator SEBI allocated Rs 8,000 crore of government debt to 12 foreign institutional investors and their sub-accounts, including JP Morgan Chase Bank, Barclays Bank, Standard Chartered Bank, in an open bidding platform that took place on the NSE platform last week.

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JP Morgan Chase Bank, Barclays Bank, Standard Chartered Bank and Copthall Mauritius Investment were allocated Rs 800 crore of government debt each, the Securities and Exchange Board of India (SEBI) said in a statement.

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Deutsche Bank International, Citicorp Investment Bank, BNP Paribas, Nomura Mauritius, Schroder International Selection Fund and Bank of America Singapore successfully bid for Rs 750 crore of government debt each.

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These debts were allocated to FIIs after they were left unutilised under the investment limits for government debt set for FIIs.

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The government has set a ceiling of USD 8 billion of government debt for FIIs.

On September 4, SEBI had cut the investment limit for an FII in government debt to Rs 800 crore from Rs 1,000 crore.

“The government wants wider distribution of government debt in the hands of several FIIs, instead of having bigger impact of any single FII on government debt market,”SMC Capitals Equity Head Jagannadham Thunuguntla said.

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Fund Advisors (UK) and DBS Bank were allocated government debt worth Rs 250 crore and Rs 50 crore respectively.

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