NSE's debt trading starts off on tepid note with 6.6 crore turnover

MUMBAI: The National Stock Exchange (NSE), which launched the country's first exchange traded debt segment on Monday, saw a turnover of Rs 6.63 crore on its platform. The contribution to NSE's debt segment came from 52 trades done by retail investors and one trade by IDBI Bank which sold 9.15% yield Tata Power bonds worth Rs 5 crore.

Market experts said trading in the debt segment will pick up only after foreign institutional investors (FIIs), mutual funds, insurance and pension funds are allowed to trade in the segment. While capital market regulator Sebi will issue guidelines for FIIs to trade in the debt segment by next month, the entry of insurance and pension funds will require change in the regulations, said a senior Sebi official. Debt segment could see major FII participation as this class of investors has been allowed to use debt as collateral to trade in the equity segment.

"The government will have to amend the SCRR (Securities Contracts Regulation Rules) before pension and insurance funds are allowed to trade in the debt segment on the exchange platform," said the official. According to the official, the insurance and pension regulators Irda and PFRDA have given their go ahead for the funds to trade in the segment. Sebi will allow trade settlement system of delivery vs payment, where trades will be netted on an intra-day trading basis for institutional players. At present, only gross settlement of trade is allowed.