Markets regulator SEBI has directed portfolio management services (PMS) to undertake minimum 10% of their monthly secondary market trades in corporate bonds through the Request for Quote (RFQ) platform of stock exchanges.
SEBI said the move will boost liquidity on exchange platforms as well as enhance transparency pertaining to debt investments by PMS.
The rule will come into effect from April 1, 2022.
Similar regulation is already in place for mutual funds. Recently, SEBI enhanced the minimum trade requirement through the RFQ platform for mutual funds from 10% to 25%.
The RFQ platform allows interaction amongst the market participants who wish to negotiate transactions amongst themselves. This platform is a participant-to-participant model where an initiator may request other participants for a quote in corporate bonds, commercial papers, certificates of deposit, government securities or state development loans.
