What changed
RBI mandated NBFCs to report secondary market OTC corporate bond transactions on FIMMDA's reporting platform effective September 1, 2007. FIMMDA will aggregate trades from its platform along with those from BSE and NSE, adding value. NBFCs can participate in mock sessions before the go-live date.
What it means for you
NBFCs must now ensure their systems can report OTC corporate bond trades to FIMMDA, adding operational overhead. This move aims to enhance transparency in the corporate bond market, aligning with Patil Committee recommendations. Banks and NBFCs dealing in corporate bonds will need to coordinate with FIMMDA for guidelines and testing.
What you must do
- Contact FIMMDA directly to participate in mock reporting sessions before September 1, 2007.
- Prepare internal systems to report secondary market OTC corporate bond transactions on FIMMDA's platform from the effective date.
- Review FIMMDA's detailed operational guidelines once issued to ensure compliance.
Who it affects
All Non-Banking Financial Companies (NBFCs), FIMMDA
What transactions must NBFCs report on FIMMDA's platform?
All secondary market transactions in corporate bonds done in the OTC market must be reported from September 1, 2007.
What is the purpose of this reporting requirement?
To enhance transparency and develop the corporate bond market, as recommended by the Patil Committee.