SEBI, RBI working to launch derivatives on corporate bond indices: Tuhin Kanta Pandey

SEBI Chairman Tuhin Kanta Pandey stated on June 8, 2026, that the Securities and Exchange Board of India and the Reserve Bank of India are working to launch derivatives on corporate bond indices. This move aims to deepen the debt market and improve liquidity, aligning with the budget’s reforms. Pandey noted that a working group is finalizing operational details for a market-making framework, building on RBI’s February draft guidelines for total return swaps and bond index derivatives. The RBI has already outlined draft rules for these products, and exchanges are preparing to introduce them once finalized. Pandey highlighted that corporate bond issuances reached ₹9 trillion in FY26, with the market cap at 128% of GDP. Derivatives on bond indices will provide investors with better hedging and allocation tools, addressing concerns from foreign portfolio investors (FPIs). SEBI has also taken steps to attract global capital, including the Swagat framework for streamlined FPI onboarding and easing regulatory requirements for investments in government securities. Tax exemptions for FPIs on government securities and the removal of certain corporate debt investment limits have further improved capital flows. Enhancements to closing auctions and block deal frameworks have also boosted price discovery and liquidity. Pandey emphasized that India’s capital markets are increasingly vital for household savings, with household financial savings rising to 21.7% of GDP in FY25 from 20% in FY23. The growing participation underscores the need for robust market design and regulation. The initiatives aim to strengthen the debt market’s efficiency and transparency, supporting broader economic growth.