(PTI)
To deepen the bond markets, regulator Sebi today proposed a uniform methodology to determine pricing of non-traded and thinly traded non-convertible debt securities. The requirement of such a framework also assumes significance as large number of such investors belong to categories such as mutual funds, insurance companies and pension funds, which have a mandate of daily net asset value (NAV) with an exit facility at any point of time for their investors. This requires a reliable and accurate price of the outstanding securities on a daily basis.
As per Sebi, the current practice of pricing of corporate bonds varies for different classes of regulated entities and this impacts trading in the secondary market. Accordingly, it has been recommended that a uniform pricing methodology be evolved, which provides prices on a daily basis and may be followed by all the regulated entities for valuing their corporate bond portfolio.
“Availability of such a uniform pricing framework, will ultimately lead to improvement in liquidity in the secondary market and thus will help in deepening the bond markets,” the Securities and Exchange Board of India (Sebi) said in a 15-page consultation paper. The regulator has sought public comments on the proposal till June 18 and final regulation will be put in place after taking into consideration views of all the stakeholders.
