SEBI announced some measures in furtherance of bringing in more transparency and regulations around debt mutual funds on July 22nd.
SEBI in its circular asked mutual funds to undertake at least 10% of their total secondary market trades by value in corporate bonds (excluding Inter Scheme Transfer trades) by seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges. This seems to be a good measure as it would improve the liquidity of the bonds as well as lead to better price discovery.
Another measure has been full portfolio disclosure on a fortnightly basis within 5 days of every fortnight and disclosure of the yield of each instrument. This will help mutual fund analysts and investors to identify risks much earlier in any fund and take the required action.
