Introduction of futures contracts on Corporate Bond Indices

The Securities and Exchange Board of India (SEBI) on January 10, 2023, issued a notification on the introduction of futures contracts on Corporate Bond Indices. Based on the submissions made by the working group and recommendations of the Secondary Market Advisory Committee of SEBI, it has been decided to permit Stock Exchanges to introduce derivative contracts on indices of corporate debt securities rated AA+ and above. To start with, the Stock Exchanges are permitted to launch futures contracts on corporate bond indices. 

The stock exchanges desirous of introducing such contracts shall submit a detailed proposal to SEBI for approval, inter alia, providing details relating to the underlying corporate bond index, the index methodology, contract specifications, applicable trading, clearing & settlement mechanism, risk management framework, the safeguards to ensure market integrity, investor protection, surveillance systems.