Transaction in Corporate Bonds through Request for Quote (RFQ) platform by Alternative Investment Funds (AIFs)
Summary
SEBI mandates that Alternative Investment Funds must execute at least 10% of their monthly secondary market corporate bond trades by value on the Request for Quote platform. Transactions where an AIF is on both sides of the trade must be executed in 'one-to-one' mode, while other AIF-to-AIF trades in 'one-to-many' mode are classified accordingly. This requirement becomes effective from April 01, 2023.
Text
AIFs shall undertake at least 10% of their total secondary market trades in Corporate Bonds by value in a month by placing/seeking quotes on the RFQ platform.
all transactions in Corporate Bonds wherein AIF(s) is on both sides of the trade shall be executed through RFQ platform in ‘one-to-one’ mode.
any transaction entered by an AIF in Corporate Bonds in ‘one-to-many’ mode which gets executed with another AIF, shall be counted in ‘one-to-many’ mode and not in ‘one-to-one’ mode.
The aforesaid requirement shall come into force with effect from April 01, 2023.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Transaction in Corporate Bonds through Request for Quote (RFQ) platform by Alternative Investment Funds (AIFs). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.