MF Update: SEBI recommends uniform pricing for debt schemes

The market regulator SEBI has taken one more step to develop the bond market. It has suggested uniform procedure to determine pricing of thinly and non-traded, traded non-convertible debt securities.

As per SEBI, the current pricing practice of corporate bonds differs for various classes of regulated entities which impacts trading in the secondary market. So, it has been planned that a uniform pricing methodology be evolved, which will provide prices on a daily basis and can be followed by the regulated entities for valuing their corporate bond portfolio.

The Securities and Exchange Board of India (SEBI) has stated in a 15-page consultation paper that the availability of such a uniform pricing framework will ultimately lead to enhancement in liquidity in the secondary market, which will be helpful in deepening the bond markets.

The proposal from the regulator is open for public comments till June 18. Post this, after taking into consideration views of all the stakeholders, the final regulation will be put in place. The proposal is drafted post consultation with various industry bodies and market representatives such as Association of Mutual Funds in India (AMFI) and Fixed Income Money Markets and Derivatives Association (FIMMDA).