SEBI Allows Mutual Funds (MFs) to Sell Credit Default Swaps to Boost Corporate Bond Liquidity.

Banking & Finance

The Securities and Exchange Board of India (SEBI) has granted permission for mutual funds (MFs) to sell credit default swaps (CDS) as a measure to enhance liquidity in the corporate bond market. This move aims to provide MFs with additional tools for managing credit risk and promoting market stability. By allowing MFs to engage in CDS transactions, SEBI hopes to deepen the corporate bond market, making it more attractive for investors. The decision is expected to facilitate better pricing, improve risk management, and ultimately increase participation in corporate bonds, contributing to the overall growth of India's financial markets.


      Enhancing corporate bond liquidity will attract more investors, fostering a healthier financial ecosystem in India.

      The introduction of credit default swaps will enable mutual funds to better manage risks and optimize returns.

     

 

     


About SEBI,

Chairperson: Madhabi Puri Buch
Headquarter : Mumbai
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