BSE to start corporate debt market platform

The new initiative is aimed at mitigating the market risk of a buyer not receiving bonds after having remitted the funds or a seller not getting the payment for bonds.
The bourse would also soon launch a Corporate Bond Repo, another new product for the Indian market.

“We hope to operationalise the ICDM platform on the exchange by next week,” BSE Product Strategy Head Sayee Srinivasan told PTI.

“We are now in the process of signing up banks and other players in the system and testing our connectivity with their back offices, depositories, and RBI’s RTGS system,” he said.

He further said that the BSE was awaiting guidelines for the Corporate bond repo. “After RBI provides the guideline, we will launch CBR in four weeks,” he said. However, he said that even the new system, would not be able to mitigate the counterparty risk completely.
There is likelihood that the trade could get canceled due to default of counterparties.
A lack of supply of identical underlying securities in the bond market unlike equities would be a stumbling block for exchanges to guarantee any trade.