Mumbai: To further develop the debt market, the Reserve Bank on Wednesday allowed standalone primary dealers to trade in corporate bonds.
"With a view to further developing the debt market in India, it has been decided to permit standalone PDs (primary dealers) to become members of SEBI-approved stock exchanges for the purpose of undertaking proprietary transactions in corporate bonds," RBI said in a notification.
RBI said the standalone PDs should comply with all regulatory norms laid down by SEBI as well as all the eligibility conditions of stock exchanges.
Further, to deepen the bond market, RBI in late January had allowed the standalone PDs to borrow up to 50 per cent of their net-owned funds in overnight call money markets to invest in corporate bonds.
Besides, it also allowed them to invest up to 10 percent of their total capital funds in tier II bonds issued by other PDs, banks and financial institutions.
PTI
First Published: Wednesday, February 06, 2013, 20:47