The Securities and Exchange Board of India on 6th October 2021 has notified that on monthly basis, Mutual Funds shall undertake minimum 25% of their total secondary market trades by value in Corporate Bonds by placing/seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges.
Further, Mutual Funds shall now undertake a minimum of 10% of their total secondary market trades by value in Commercial Papers by RFQ platform.
Mutual Funds are permitted to accept the Contract Note from the brokers for transactions carried out in One to One (OTO) and One to Many (OTM) modes of RFQ platform.
This has been done, based on the recommendations of Mutual Fund Advisory Committee (MFAC), in order to further increase the liquidity on exchange platforms as well as enhance transparency and disclosure pertaining to debt schemes and investments by mutual funds in corporate bonds or commercial papers.
