Sebi puts in place framework for corporate debt market development fund

Mumbai: A day before finance minister Nirmala Sitharaman is expected to launch the Corporate Debt Market Development Fund (CDMDF) in Mumbai, Sebi has come out with the guidelines for the fund. The fund will act as a backstop facility for purchase of investment-grade corporate debt securities, to instil confidence among the participants in the corporate debt market during times of stress.

It would also enhance secondary market liquidity by creating a permanent institutional framework for activation in times of market stress.

CDMDF would be launched as a close ended scheme with an initial tenure of 15 years from the date of its initial closing. The units of CDMDF can be subscribed by asset management companies (AMCs) and specified debt-oriented mutual fund schemes, excluding overnight funds, gilt funds and conservative hybrid funds.