Mumbai: The market regulator Securities and Exchange Board of India (SEBI) said it is in favour of allowing participation of mutual funds, insurance companies and pension funds in the debt trading platform.
"Insurance companies and pension funds may be able to participate as trading members on the debt segment of exchanges. Their participation is likely to need a change in regulation," SEBI Whole Time Member, Rajeev Kumar Agarwal told reporters on the sidelines after inaugurating MCX-SX debt platform here yesterday.
Insurance companies can come, but IRDA is again to come out with regulations. SEBI has proposed for amendment required for FCRA for insurance companies to participate in debt trading, Agarwal said.
Banks and primary dealers were first to enter and they will provide enough liquidity in the debt segment, he said.
After National Stock Exchange (NSE), the MCX SX also launched dedicated debt trading platform and will go live from Monday.
The debt trading platform is expected to provide an opportunity to retail investors to invest in corporate bonds on a liquid and transparent exchange platform.
Over the years, an acute need has been felt for a dedicated debt platform on an exchange, where small investors can trade in corporate bonds, of even small value, and get transparent prices.
"Sebi is optimistic and we see huge scope for development of the bond market in the country. Debt platform is different in terms of risk, liquidity and nature of participants, Agarwal said.
"With the launch of our dedicated debt segment as well as the equity segment turnover crossing Rs 1000 crore mark, we have crossed yet another milestone and demonstrated our commitment towards building a world class exchange for India," MCX-SX Managing Director and CEO Joseph Massey said.