SEBI’s Upfront Charges Framework for Debt Securities Allotment

debt securities

On 13th April 2023, the Securities and Exchange Board of India (SEBI) issued a circular in regard to contributions by eligible issuers of debt securities to the Settlement Guarantee Fund of the Limited Purpose Clearing Corporation for repo transactions in debt securities.

A well-functioning repo market contributes to the development of the debt securities market, inter alia, by way of boosting the liquidity of the underlying debt securities and providing a facility to market participants to monetise their debt holdings without selling the underlying, thus meeting their temporary need for funds. The development of an active repo market in debt securities may also be beneficial to the Issuers as the enhanced liquidity may positively impact the yield, thereby resulting in reduced costs of raising funds for the issuers in the primary market.

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