AMC Repo Clearing launched “Triparty Repo in Corporate Debt Securities” with the objective of developing the underlying Corporate Bond market in India. It has setup a Core Settlement Guarantee Fund primarily with contributions from issuers of corporate bonds to provide settlement guarantee in the repo market. This is expected to help eliminate the need for bilateral counterparty exposure limits.
At end-July, the total traded value reported is Rs. 480 crores ($58.3mn). The entities who participated in the launch (in alphabetical order) are Aditya Birla Sun Life Mutual Fund, Axis Bank, East India Securities, HDFC Mutual Fund, Kotak Mutual Fund, State Bank of India, SBI Mutual Fund, Trust Financial.
“We expect all institutional investors including mutual funds, banks, corporates, insurance companies, NBFCs [non-bank financial companies] and other regulated entities to participate in this market,” AMC Repo said in a statement.