Corp bonds trading on BSE, NSE soon

As part of efforts to develop the corporate bond market, trading platforms for the fledgling instruments are expected to be operational from July at the Bombay Stock Exchange and the National Stock Exchange.

The Securities and Exchange Board of India has informed that the trading platforms for corporate bonds at the two premier exchanges -- Bombay Stock Exchange and National Stock Exchange -- are expected to be operational from July 1, official sources told PTI.

The trading platforms would help in developing the corporate bond market fast by making them liquid so as to provide investors another option for diversification of risk.

While the trading platforms are likely to be operational by July, a reporting platform for providing quotes for corporate bonds at BSE has been functional since January 12

and at the NSE from this month.

However, sources said exchange-traded market for corporate bonds are no guarantee that this market would be developed in the country.

Institutions are the major participants in the corporate bonds market, they said adding where is the deep money in these institutions that can be invested in these instruments.

Even in the US, major corporate bonds are outside the exchange traded platform, they said.

Creating exchange-traded platform for corporate bonds is part of many recommendations given by the high-level R H Patil committee in 2005.

The government accepted recommendations made by the committee in Budget 2006-07.