SEBI allows exchanges to launch futures contracts in corporate bond indices

Stock exchanges can launch futures contracts on corporate bond indices, according to a circular by the capital markets regulator Securities and Exchange Board of India (SEBI).

The SEBI circular dated January 10 stated that the stock exchanges can introduce contracts of up to a tenure of three years. The bourses can introduce derivative contracts on indices of corporate debt securities rated AA+ and above.

The corporate bond index should be composed of debt securities and the constituents of the index should have adequate liquidity and diversification at the issuer level.