New Delhi [India], October 1 : The National Stock Exchange of India (NSE) has received a No Objection Certificate (NOC) from the Securities and Exchange Board of India (SEBI) to introduce futures contracts on a Corporate Bond Index, a move aimed at providing market participants with an exchange-traded tool for managing corporate bond market risk.
NSE said in a press release on Thursday that the proposed Corporate Bond Index Futures is intended to provide an additional avenue for risk management, portfolio hedging and price discovery, while supporting the development of India's corporate bond derivatives ecosystem.
The product is also expected to facilitate market making by allowing participants to manage the market risk arising from their corporate bond portfolios, according to the exchange.
The introduction of the futures contracts, however, remains subject to the requisite approval from the Reserve Bank of India (RBI).
Commenting on the development, Sriram Krishnan, Chief Business Development Officer, NSE, said the SEBI NOC marked an important milestone in the evolution of India's fixed income markets.
“The SEBI NOC for Corporate Bond Index Futures marks an important milestone in the evolution of India’s fixed income markets. A well-developed derivatives ecosystem can play an important role in strengthening the underlying corporate bond market by enabling more efficient risk transfer and supporting greater institutional participation,” Krishnan said.
He added that the initiative reflected NSE's continued efforts towards building deeper, more liquid and resilient debt markets in India.
The proposed product is part of NSE's broader efforts to deepen India's fixed income markets and expand the range of exchange-traded risk-management products available to market participants.
Corporate Bond Index Futures would allow participants to take positions linked to the performance of a corporate bond index through exchange-traded contracts, providing a mechanism to manage exposure to movements in the underlying corporate bond market.
The proposed product comes as India's corporate bond market continues to develop, with the exchange positioning the futures contracts as a complementary instrument for risk management and price discovery.
NSE said the initiative is aimed at facilitating a broader corporate bond derivatives ecosystem in India, while enabling more efficient risk transfer and supporting greater institutional participation in the debt market.