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SEBI has issued a circular where it has classified Corporate Debt Market Development Funds (CDMDFs) as Cat I AIFs. Currently, CDMDFs are classified as a determinate trust under AIF regulations. The regulator has issued this clarification after receiving requests to provide clarity on their classification.
SEBI had introduced CDMDFs last year with an aim to instil confidence among participants in the corporate debt market during times of stress and enhance liquidity in the secondary market.
Currently, CDMDFs can deal in low duration government security, treasury bills, tri-party repo on government securities and guaranteed corporate bond repo with a maturity up to 7 days. They are also allowed to buy listed money market instruments during times of market distress.