SEBI Update: Transaction in Corporate Bonds through Request for Quote (RFQ) platform by Alternative Investment Funds (AIFs)

SEBI vide its circular date 1st Feb 2023, has mentioned that AIFs shall undertake at least 10% of their total secondary market trades in Corporate Bonds by value in a month by placing/seeking quotes on the RFQ platform.

Further, in terms of SEBI Circular dated October 19, 2022, quotes on RFQ platform can be placed to an identified counterparty (i.e. ‘one-to-one’ mode) or to all the participants (i.e. ‘one-to-many’ mode). In this regard, it is clarified that all transactions in Corporate Bonds wherein AIF(s) is on both sides of the trade shall be executed through RFQ platform in ‘one-to-one’ mode. However, any transaction entered by an AIF in Corporate Bonds in ‘one-to-many’ mode which gets executed with another AIF, shall be counted in ‘one-to-many’ mode and not in ‘one-to-one’ mode.

The aforesaid requirement shall come into force with effect from April 01, 2023.

Link of the circular: View Circular