On May 13, 2025, the Securities and Exchange Board of India (SEBI) released Circular bringing important changes to the operational processes of the Request for Quote (RFQ) platform and clarifying disclosure requirements in the corporate bond database. These changes are aimed at enhancing ease of use, improving transparency, and reducing complexity for participants in India’s debt market.
Streamlining Yield-to-Price Computation on RFQ Platform
One of the key aspects of the circular is the simplification of the yield-to-price computation process for non-convertible securities traded on the RFQ platform. The RFQ platform, which facilitates negotiations and execution of trades in listed debt instruments, is governed by Chapter XXII of SEBI’s NCS Master Circular dated May 22, 2024.
Previously, yield-to-price calculations involved adjustments based on the day count convention, which could vary depending on how many days were assumed to be in a year (e.g., 360 vs. 365). This often introduced complexity and required additional calculations, especially when determining the accurate pricing of bonds and other securities.
SEBI has now clarified that cash flow dates used for these computations shall be based on the scheduled due date of payments (i.e., interest, dividend, or redemption) as outlined in the security’s cash flow schedule. These dates will no longer be adjusted for the day count convention, thereby removing a layer of complexity and creating a uniform standard for pricing across the RFQ platform.
This update has been formally added to the NCS Master Circular as Clause 9 in Chapter XXII, and applies to all relevant instruments including non-convertible securities, securitised debt instruments, municipal debt securities, and commercial papers.
Cash Flow Disclosure in Centralized Corporate Bond Database
The second part of SEBI’s circular addresses cash flow disclosure requirements in the centralized corporate bond database. Under Clause 3.3.34 of Schedule I of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, issuers are required to disclose detailed information on interest, dividend, and redemption payments in the offer document, using dates adjusted according to the day count convention.
This has led to confusion in practice, especially when reconciling disclosed payment dates with actual cash flow schedules that appear in deal documentation or databases. In this circular, SEBI has clarified that the disclosure must reflect the actual due dates for these payments as per the contractual schedule, rather than adjusting them for day count conventions. This harmonization with the RFQ platform approach will help improve consistency and reduce discrepancies between various reporting and trading systems.
